KUALA LUMPUR:'' CIMB Equities Research is positive on KENCANA PETROLEUM BHD []'s proposed buy-out of Mermaid's shares in three jointly owned drilling units for US$66.6 million.
It said on Tuesday, June 22 that one of the target units is MKR1, which owns drilling rig KM1.
'We take a positive view of the acquisitions because they will give Kencana total control of the drilling assets and provide an earnings boost. The deal is slated for completion in 1QFY1/11,' it said.
CIMB Research said imputing the new earnings stream, it raised its FY11-12 EPS forecasts by 11.3-14.0% while retaining its FY10 forecast.
'Our target price rises from RM1.90 to RM2.15, pegged to an unchanged target market P/E of 15x. Kencana remains an OUTPERFORM, with the potential share price triggers being 1) active order book replenishment, and 2) M&As,' it said.
It said on Tuesday, June 22 that one of the target units is MKR1, which owns drilling rig KM1.
'We take a positive view of the acquisitions because they will give Kencana total control of the drilling assets and provide an earnings boost. The deal is slated for completion in 1QFY1/11,' it said.
CIMB Research said imputing the new earnings stream, it raised its FY11-12 EPS forecasts by 11.3-14.0% while retaining its FY10 forecast.
'Our target price rises from RM1.90 to RM2.15, pegged to an unchanged target market P/E of 15x. Kencana remains an OUTPERFORM, with the potential share price triggers being 1) active order book replenishment, and 2) M&As,' it said.
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