Analyst Lee Wee Keat said re-rating catalyst for the stock would depend on job orders in the remaining six months of the year.
"We reiterate our hold rating for KNM with a target price of 55 sen, pegged to nine times financial year 2011 forecast price earnings," he said.
Lee said the counter is currently trading at 8.4 times financial year 2011 forecast price earnings against the sector's 8.8 times and the region's 15 times.
However, HwangDBS Vickers said it is optimistic about the company's recent share buy-back activities in the market.
KNM has a strong cash balance of RM496.7 million as at first quarter this year. Collectively, the company has 76.1 million treasury shares on its balance sheet recently.
The group secured RM1 billion worth of jobs thus far, double what it secured in the first half of 2009.
Its current order book is at the year-high of RM2.4 billion compared to RM1.8 billion at the beginning of the year.
"We understand KNM is eyeing several sizeable contracts worth more than RM100 million in Southeast Asia and Europe," Lee said.
by Business Times
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