Maintain BUY with a MYR2.68 TP. The one-year contract extension for PETRONAS' T&I work worth MYR1.3b is a positive for SapuraKencana's order book and provides extended earnings visibility. It also reflects the growing momentum of PETRONAS' contract flows in Malaysia. We expect order flows to intensify in 2H12, for several sizeable domestic projects are underway. Our target price pegs SapuraKencana at 20x FY1/14 EPS, supported by its robust growth prospects and lean balance sheet.

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Source: Maybank Research - 25 May 2012