Monday, May 30, 2011

Alliance Research downgrades Alam Maritim to Sell, cuts TP to 89 sen

KUALA LUMPUR: Alliance Research Sdn Bhd has downgraded ALAM MARITIM RESOURCES BHD [] to a Sell and slashed its target price to 89 sen from 98 sen, and said the company's earning visibility remained uncertain.

The research house also downgraded Alam's FY11 and FY12 net profit projection by 15% to 20% due to its lower than expected 1QFY11 results.

It said Alam registered a smaller net loss of RM6.7 million in 1QFY11 compared to a net loss of RM49 million in 4QFY10.

The worst-than-expected results were hit by losses suffered at its associates division, higher'than-expected operating expenses (demobilisation of vessels for repairs and maintenance) and lower vessels utilisation rate, it said in a note May 30.

'Correspondingly our target price is downgraded from 98 sen to 89 sen based on 13x revised FY11 EPS.

'Since the current share price of RM1.05 represent a downside of 15.2%, we downgrade our call from Hold to Sell,' it said.

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