More news on KPS...

Kumpulan Perangsang Selangor Bhd (KPS) is well placed to secure the Langat 2 water scheme project, said executive chairman Datuk Abdul Karim Munisar.Speaking after the group's AGM yesterday, he said KPS had been involved in Langat 2 since 1999 and had spent some RM5mil on preliminary and feasibility studies on the project.In his first ever statement on Langat 2 since taking office in 2004, Abdul Karim said: Being a government-linked company with the expertise and financial strength to undertake the project, we are putting all efforts to make sure we do our best to realise it¨.

The Langat 2, which is part of the Pahang-Selangor inter-state water project that would be opened for tender in the second half, is a treatment and storage facility for raw water that is transferred from Pahang.The facility would reportedly cost RM2.5bil.With the Government planning to stop awarding water concessions to private companies, KPS is currently the top candidate to develop the facility.

Its up to the Federal Government now,¨ Abdul Karim added.He said Langat 2, when fully operational, would double KPS' supply capacity to some 4,000 million litres per day (mld), making it the country's largest water supplier. The underground and surface water project is slated to provide a total of nearly 200mld. KPS made itself a clear-water player by recently taking control of treated water supplier Konsortium Abass Sdn Bhd.It also has a 30% stake in Syarikat Pengeluar Air Selangor Holdings Bhd, which is the concessionaire for Sungai Selangor Phase 1 and 3, and 20% in Taliworks Corp, a subcontractor to concessionaires and a concessionaire for water supply in Langkawi.

Meanwhile, Abdul Karim said the group was looking at venturing into a RM150mil independent power producer and RM600mil toll-road projects, both in Sumatra.Initiated by the group's partners, these projects would be KPS' maiden forays abroad. Next will be a water project in China,¨ he added.The group, according to Abdul Karim, is also talking to some state governments on the potential of mining projects.For the year ended Dec 31, 2006, KPS posted a pre-tax profit of RM28.3mil compared with a pre-tax loss of RM123.8mil previously.

My opinion: Buy and keep, for more upside is coming.