Maintain BUY with a MYR2.68 target price. While the earnings impact of the AUD51m EPCIC job from Origin Energy will be immaterial, the win reflects SapuraKencana's aspiration to expand its regional footprint and capitalise on opportunities, both locally and abroad. We see SapuraKencana as a steady growth stock, asset rich and balance sheet light (low net gearing), which will aid its quest to add new assets in a highly capital intensive O&G environment. Our target price pegs SapuraKencana at 20x FY1/14 EPS. Valuations are inexpensive, considering the strong earnings growth outlook over the next three years and its balance sheet strength.

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Source: Maybank Research - 23 May 2012