Stock Name: KENCANA
Company Name: KENCANA PETROLEUM BHD
Research House: AMMB



AmResearch notes that Kencana Petroleum Bhd group order book of RM1.9 billion is likely to rise further with new jobs from tenders of RM4 billion, largely from the Kebabangan cluster platform contracts.

The research house projects new orders of RM1.5 billion to RM1.8 billion for financial year 2011-13 against RM1 billion in financial year 2010.

AmResearch also expects further margin expansions.

"Kencana's EBITDA margins have consistently been improving, rising by a commendable 9 percentage points over the past four years to 18 per cent in financial year 2010 largely due to improving operational efficiencies."

AmResearch sees Kencana a "buy" at RM2.50. - Reuters