KUALA LUMPUR: OSK Research is maintaining its Buy call on Alam Maritim with an unchanged target price of RM1.50.
Alam Maritim recently accepted an extension of a spot charter contract to supply of one straight supply vessel worth a contract value of RM11.0m.
OSK Research said the company's announcement of the one-year contract however did not identify the customer, but it believed it is likely be Petronas or its PSC contractors since this is a renewal of contract and the bulk of Alam's existing vessel contracts are from the domestic market
'After the company undertook a kitchen sinking exercise in FY10, we believe the worst is now over. However, as we mentioned earlier, we do not expect Alam's 1H11 results to be very good as it was still affected by the monsoon season in 1Q.
'Also, Petronas' focus is now on the initial stage of marginal oilfield developments and not towards the tail-end of activities, which would more of a 2H11 focus. We maintain a Buy on the company for now, with an unchanged target price of RM1.50 based on the existing PER of 15x FY11 EPS,' it said.
Alam Maritim recently accepted an extension of a spot charter contract to supply of one straight supply vessel worth a contract value of RM11.0m.
OSK Research said the company's announcement of the one-year contract however did not identify the customer, but it believed it is likely be Petronas or its PSC contractors since this is a renewal of contract and the bulk of Alam's existing vessel contracts are from the domestic market
'After the company undertook a kitchen sinking exercise in FY10, we believe the worst is now over. However, as we mentioned earlier, we do not expect Alam's 1H11 results to be very good as it was still affected by the monsoon season in 1Q.
'Also, Petronas' focus is now on the initial stage of marginal oilfield developments and not towards the tail-end of activities, which would more of a 2H11 focus. We maintain a Buy on the company for now, with an unchanged target price of RM1.50 based on the existing PER of 15x FY11 EPS,' it said.
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