Thursday, December 15, 2011

RHB Research has FV of RM4.50 for SapuraCrest, Kencana

KUALA LUMPUR (Dec 15): RHB Research Institute has outperform calls on SAPURACREST PETROLEUM BHD [] and KENCANA PETROLEUM BHD [] and fair values of RM4.50 for both companies.

News reports had on Thursday reported that Sapuracrest had secured 99.5% approval, for their proposed merger with Kencana and gotten approval for the Clough marine division purchase.

SapuraCrest also planned to spend RM1.4 billion as capex in the next two years for new vessels and expansion to high growth areas such as Australia, India, Middle East and the domestic market

'In regards to the RM1.4 billion capex, we believe it is mainly for the three pipe-laying assets that will be utilised for the Brazil project.

'We understand Kencana's EGM will be held today, and, in our own view, it is likely to have a similar outcome,' it said.

RHB Research said at RM2.79, Kencana appeared to be a more attractive entry point into IKB with a potential upside of 6.8% (versus Sapuracrest's upside of 2.8%).

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