Alam Maritim Resources Berhad ("Alam”) announced that the group had entered into a charter party agreement with Allianz Middle East Ship Management LLC for the provision of a safety standby rescue vessel. The contract is for the vessel charter of MV Setia Emas, for a primary period of three years with an extension option of another two years. The contract value is approximately RM40.7 million (inclusive of extension period). (Source: Bursa Malaysia)

Comments: We are positive on the contract win as: (i) the long contract tenure (3 years with option for 2 years extension) will ensure high vessel utilisation rate and improve earnings visibility over the next 3 years; and (ii) the average charter rate of RM22,300/day is broadly in line with our forecast. We maintain our earnings forecast, BUY rating and TP of RM0.72 based on 0.8x price to book multiple.

Source: Affin Hwang Capital Research - 5 Aug 2015