SapuraKencana Petroleum; Buy; RM4.02
Price Target: RM4.85; SAKP MK

SAKP announced that its wholly-owned subsidiary, Kencana HL Sdn Bhd has been awarded a US$180.65m (~RM575m) job from Trans Thai-Malaysia (Malaysia) Sdn Bhd (TTM) for the provision of engineering, procurement, construction, installation and commissioning (EPCIC) of JDA Gas Balancing Evacuation project for TTM. The 3-year contract is expected to commence in 2Q13.

TTM is the operator of the major gas export line from the Malaysia-Thai Joint Development Area (MTJDA). We believe that the contract involves the fabrication of a new riser platform and installation of a pipeline to bring gas from MTJDA to Malaysian waters. There is no change to our earnings forecast given the relatively small contract amount vis-à-vis its strong order book of RM18bn (include own portion from JVs’ order book).

We continue to like SAKP as its unrivalled integrated offshore services will naturally place it among the frontrunners for bidding of mega projects in Malaysia. We reiterate our BUY rating with RM4.85 TP, based on 22x FY15 EPS.

Source: HwangDBS Research - 10 Jul 2013