New contract wins - Sapura Energy secured 4 contracts with a combined value of RM879m which are as follows:-
Subcontract works of engineering, procurement, construction and installation (EPCO) of wellhead platforms, associated pipelines and tie-ins for Zawtika Field Development if offshore Myanmar and is expected to complete by March 2018.
Upgrade offshore single point mooring replacement for Brunei Shell Petroleum Co for 21 months starting April 2018.
Transport and installation (T&I) balance subsea works for Oil and Natural Gas Corporation Limited which is expected to complete by 2Q17.
Inspection, repair and maintenance (IRM) services to PTTEP Australasia, which is expected to complete by next month.
Comment
Rising orderbook – Following the recent wins, the Group’s orderbook is estimated to grow to RM17.5bn from RM16.7bn in 4QFY17.
Earnings Outlook
Earnings forecast maintained – We are keeping our forecasts for FY18 and FY19 as the new jobs’ value are within our estimated replenishment.
Valuation & Recommendation
We are keeping our recommendation at HOLD with an unchanged target price of RM1.75 based on FY18F EPS and 20x forward PER given its geographical diversification and wide coverage of the supply chain.
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