KGB (0151) Kelington Group Berhad: Will the dry ice story actually materialise?
Couple of weeks ago, Pfizer defended their vaccine's storage conditions by saying that it can be transported in boxes with dry ice in it. At the temperature requirement of -70 degrees, obviously this vaccine is no longer feasible anymore for the developing countries. Billions will need to be spent to build the infrastructure to transport this vaccine. Pfizer then came out to defend their vaccine with the dry ice box.
After Pfizer came out with this dry ice box method, an analyst with a research house managed to identify KGB as a liquid carbon dioxide manufacturer. Liquid CO2 is needed to make dry ice. While that was some good thinking, the way he has been banging the table and pushing the idea that KGB's dry ice business will propel their earnings to the sky is disturbing.
You just have to ask this question - will the dry ice story materialise? My opinion is no. This is because the dry ice box may be needed to get the Pfizer vaccine to the interiors of Malaysia but before that, the vaccines need to be transported in -70 degree containers, stored in -70 degree warehouses, and transported in -70 degree trucks. Malaysia only allocated RM3billion for the vaccine. With Pfizer vaccine, they probably need a few more billion and this infrastructure is not needed anymore after Covid-19 has ended. Also, only 70% of the population needs to be vaccinated to achieve herd immunity. I would imagine the government vaccinating everyone in cities and towns and not bothering about those in the interiors. There is no need for dry ice boxes if vaccinations are done in cities and towns, only refrigerated trucks are needed.
Even countries like India has rejected the Pfizer and Moderna vaccine and is waiting for China's and Astrazaneca's vaccines. Malaysia is also waiting for China's vaccine. While I also think that the Moderna vaccine is not feasible for developing countries, the Health Ministry has spoken to Moderna. But as expected, they have not bothered speaking to Pfizer eventhough they were the earliest to announce their vaccine's efficacy.
I would suggest selling KGB on strength. Do not get caught like how many did last time when every PPE and medical/chemical product linked counter rose significantly but did not deliver the significant increase in earnings expected. Examples include CCM, Oceancash, PCCS etc.
https://klse.i3investor.com/blogs/shareseatreasure/2020-11-25-story-h1536608079-Kelington_Group_Berhad_Will_the_dry_ice_story_actually_materialise.jsp
