Alam Maritim (AMRB) announced that its wholly-owned subsidiary, Alam Maritim (M) has recently received a Letter of Award from Petronas Floating LNG 1 (L) Ltd for a subcontract work for the floating LNG offshore works of final positioning and mooring system hook-up, including flexible riser installation precommissioning and commissioning of pipeline, pipe-line ends terminal and riser from KAKG (at Kanowit field, located 200km offshore to Bintulu) to FLNG (Package No 2). The subcontract is valued at RM53.5m and is effectively from 15 June 2015 to 30 April 2016. (Source: Bursa Malaysia)

Comments: This subcontract relates to Package No 2 of a total of six packages of transportation and installation works for Petronas’s Floating LNG-1 Project. In June 2015, AMRB was awarded a similar subcontract valued at RM49.0m for Package 1 of the project. The latest award is within our expectations and has been imputed in our 2015E-16E forecasts. We maintain our target price of RM0.54, which is based on 0.6x P/B and implies a 2016E PE of 16.4x. At the current price of RM0.48, BUY rating is also maintained. Key risks include sharper-than-expected regional O&G capex cuts and consequent negative impact on margins.

Source: Affin Hwang Capital Research - 22 Oct 2015