Tuesday, January 4, 2011

SapuraCrest up at mid-morning

KUALA LUMPUR: SAPURACREST PETROLEUM BHD [] shares advanced on Tuesday, Jan 4 as CIMB Research maintained its outperform call on the stock at RM3.13 and raised its target price to RM3.95 from RM3.30 previously.

At 10.45am, SapuraCrest was up nine sen to RM3.22 with 867,800 shares done.

CIMB Research in a note Jan 4 said it was encouraged by a report on Petrobras's invitation to SapuraCrest to submit a bid for a pipelay barge supply contract.

While it was still early days to talk about a potential bottomline boost, the contract, if secured, would enlarge the company's revenue base and open the doors for local companies with offshore support assets to venture into Brazil, said the research house.

'We maintain our EPS forecasts but raise our target price from RM3.30 to RM3.95, which is the highest in the market. We now attach a 20% premium to our 14.5 times target market P/E given SapuraCrest's superior growth.

'SapuraCrest remains an Outperform and our top oil & gas pick, with the potential re-rating catalysts being 1) active order book replenishment, 2) success in new markets, and 3) a growing fleet of assets,' it said.

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