ARMADA Analysis:-

Excel – http://1drv.ms/1q9SeAm

My View:-

- Fair value:
  – Absolute EY%:
    – Trailing:   
      – FY13 (EPS: 0.147) – Buy below 3.09, sell above 4.25 (MOS: 23.4%)
      – R4Q (EPS: 0.127) – Buy below 2.67, sell above 3.67 (MOS: 11.3%)
    – Forward:   
      – FY14 (EPS: 0.165) – Buy below 3.46, sell above 4.76 (MOS: 31.5%)
      – FY15 (EPS: 0.197) – Buy below 4.13, sell above 5.69 (MOS: 42.7%)
    – EPS applied to reach the current stock price (3.26): 0.113   
- With four FPSO job wins (C7, Kraken, 15/06, Madura) in 18 months, its order backlog is currently MYR31b. Following the Madura FPSO, ARMADA’s orderbook could rise to RM35bn. This includes the LOI the Angolan FPSO project worth RM9.5bn which is pending negotiations of commercial terms and the final award is expected to come by month end.
  – This should keep Bumi Armada Bhd busy for the next eight years
  – Assuming a net margin of 20%, this would mean a profit of RM800 million per year.
- I am not comfortable with financial positions of ARMADA despite increasing revenue and PATAMI. Besides, its net profit declined YoY for 3 consecutive quarters.

Latest Financial – Q2 2014 Financial Report (20 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1715577

At the time of writing, I did not own shares of ARMADA.