Tuesday, October 4, 2011

MIDF Research maintains Buy on SapuraCrest, target price RM3.90

KUALA LUMPUR: MIDF Research has maintained its Buy call on SAPURACREST PETROLEUM BHD [], premised on the company's healthy order book of estimated RM7.5 billion or equivalent to about 2.5 times revenue, which the research house said would continue to sustain its earnings growth at least for the next 2 years.

In a note Tuesday, Oct 4, MIDF Research said it was maintaining its target price at RM3.90, derived from 15% discount to the offer price of RM4.60 for its merger deal.

'The discount is to reflect the market's bearish sentiment. Our TP also implies 17.8x EPS12, which in line with its historical average since 2007,' it said.

MIDF Research said the potential IPF job for the recently announced gas project (North Malay Basin) is the immediate-term catalyst to SapuraCrest.

Improvement in LSE's yard utilisation rate and the OSV market is also positive to SapuraCrest, it said.

SapuraCrest announced on Oct 3 that its 50%-owned associate company, Labuan Shipyard & Engineering S/B (LSE), has been awarded a shipbuilding contract from Tanjung Offshore (TO), to engineer, construct, test and deliver one unit of Platform Supply Vessel (PSV) worth RM99.5 million. The PSV is expected to be delivered to TO within 21 months.


No comments:

Post a Comment