Alam Maritim's (Alam) 9MFY12 results were  above  our  expectations  but  within consensus  numbers,  making  up  90.1%  and  76.2%  of  both  full-year  estimates respectively. Revenue soared 53.5%  y-o-y, boosted by revenue contribution from its  offshore,  installation  and  construction  (OIC)  division.  We  remain  positive  on the recovery in Alam's business but are cautious on its OIC and subsea business due  to  the  absence  of  contracts  for  next  year.  Maintain  BUY,  with  an  unchanged FV of RM1.25, pegged to 13x FY13 EPS.

Within expectations. Alam's 9MFY12 net profit made up 90.1% of our expectations and 76.2%  of  consensus  estimates.  Revenue  grew  53.3%  y-o-y,  underpinned  by  stronger contributions from its OIC business (supported by  the company's current OIC contracts with  Sabah  Oil  &  Gas  Terminal  and  Samsung  Engineering  Malaysia).  Meanwhile,  net profit soared 185.7% y-o-y, mainly due to improving charter rates and the increase in the share  of  profits  from  its  associates  and  jointly  controlled  entities.  However,  compared with the preceding quarter, revenue dropped 28.8% due to lower revenue registered by its  OIC  and  subsea  division  but  net  profit  dipped  only  by  4.0%  due  to  better  margins recorded from its OSV division.

Raising  FY12  earnings  estimate  by  7.7%.  Incorporating  its  strong  earnings  in 3QFY12,  we  are  raising  our  FY12  earnings  forecast  by  7.7%  and  expect  4Q  to  be weaker due to it falling  in the monsoon season, but are leaving our earnings estimates for FY13 unchanged for now and will closely follow the developments of the company's OIC and subsea business. Other catalysts include other marginal oilfield and brownfield services  contracts,  which  have  yet  to  be  awarded  this  year.  Once  the  contracts  have been  dished  out,  we  believe  that  vessel  services  will  be  required,  thereby  benefiting players such as Alam Maritim.

Maintain  BUY. We  remain  positive  on  the  recovery  of  Alam's  OSV  business  for  2013, which  would  contribute  positively to the group's bottom-line,  but  remain  cautious  on  its OIC  and  subsea  businesses  due  to  the  lack  of  any  contracts  to  keep  both  divisions afloat at this point in time. We are maintaining our FV at RM1.25, pegged to 13x FY13 EPS.

Source: OSK