Wednesday, September 7, 2011

Alam Maritim edges up on ExxonMobil contract

KUALA LUMPUR: ALAM MARITIM RESOURCES BHD [] shares advanced in early trade on Wednesday, Sept 7 after it inked a charter party agreement with ExxonMobil Exploration and Production Malaysia Inc (EMEPMI) worth up to RM220.83 million.

At 9.05am, Alam Maritim added five sen to 78 sen with 157,500 shares traded.

The company said on Sept 6 that its unit Alam Maritim (M) Sdn Bhd had received the letter of award from EMEPMI to provide one unit accommodation vessel and of one unit anchor handling tug.

It said the contract was for a primary period of three years with an extension option exercisable by EMEPMI for another two years.

'The contract is for a value of up to RM220.83 million (if EMEPMI engages the vessel and tug for the full duration - inclusive of optional period),' it said.

Meanwhile, CIMB Equities Research maintained its Buy recommendation on Alam Martim and raised the target price to RM1.50.

It said on Wednesday, Sept 7 that given the signs of a stronger recovery in 2H, it maintained its EPS forecasts, which already include this contract.

'Although we continue to value the stock at a 20% discount to our target market P/E, our target price rises from RM1.40 to RM1.50 as we roll it forward to end-CY12 and use our CY13 target market P/E of 13.4x (prev. 14.5x CY12).

'We continue to rate Alam a BUY, with the potential re-rating catalysts being 1) this announcement, 2) more pipe installation ventures, and 3) a stronger-than-expected turnaround,' it said.


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