AMRB’s  MYR46.1m 1HFY13 core net profit, after stripping off  MYR5.5m gains,  beat  expectations  -  accounting  for  60%  and  56%  of our/consensus estimates respectively.  We bump up our FY14 earnings forecast  as  there  is  high  probability  of  the  group  securing  more offshore  installation  &  construction  (OIC)  and  subsea  jobs.  Our  FV  is upgraded to MYR2.00 (from MYR1.65). Maintain BUY.

- Exceeding  expectations.  AMRB’s 1H13 core net profit (+7.6% q-o-q; +96.3%  y-o-y)  –  after  adjusting  for  the  disposal  of  vessels  gains  worth MYR5.5m – exceeded expectations, despite weaker revenue (-20.8% q-o-q,  -23.6%  y-o-y).  The  improvement  in  profitability  was  mainly  due  to higher vessel utilisation and better operating margins.

- Small  sweetener  for  shareholders.  After  zero  dividends  in  FY11, AMRB declared a final dividend of 25 sen per share in respect of FY12. We adjusts our forecast to reflect a similar payout for FY13 and FY14.

- More  to  come  in  2H13?  AMRB  could  secure  new  jobs  from  the  Pan-Malaysian  transportation  and  installation  umbrella  contracts  (benefitting its  OIC  division)  and  more  inspection,  repair  and  maintenance  works. Both  tenders  could  be  awarded  as  soon  as  2H13.  Also,  the  group  is looking to provide third-party chartering services for oil & gas (O&G) rigs, given the strong demand on the domestic front.

- Raising  our  FY14  earnings  estimate.  We  make  no  changes  to  our FY13  financial  forecast,  as  4Q13  could  potentially  be  a  seasonally weaker  quarter  due  to  the  monsoon  season,  coupled  with  the  fact  that profits from its newly secured jobs will only flow in towards FY14. We are raising  our  FY14  revenue  forecast  by  27.4%  and  our  FY14  net  profit estimate by 20.7%, as we factor in MYR160m worth of jobs annually to be secured by either its OIC or subsea divisions.

- Raising  FV  to  MYR2.00.  We  retain  our  BUY  recommendation,  with  a higher  FV  of  MYR2.00  (from  MYR1.65).  Our  FV  is  pegged  to  14.0x FY14F EPS, which is a 10% discount to the current sector average.

Source: RHB