AMRB’s  9MFY13  net  profit  beat  our  full-year  estimates  by  2%.  The numbers  comprised  92%  of  consensus’  forecast.  The  high  9MFY13 vessel utilization  of 90% boosted  profits at  its jointly-controlled assets, and should  remain high  as Petronas may dish out more jobs.  AMRB’s estimated outstanding orderbook of MYR2bn is at a  record high.  We lift our FV to MYR2.25 on a FY14 P/E of 14x. Maintain BUY.

• 9MFY13net  profit  exceeds  our  full-year  estimate.  AMRB’s  9MFY13 core net profit of MYR76.3m (+36% q-o-q, +88% y-o-y) beat our full year estimate  by  2%.  The  numbers  made  up  92%  of  consensus’  full-year forecast.  This  was  due to the significantly higher profit contribution from its jointly-controlled entities (JCE), driven by a higher vessel utilization of about 90%.  The 9MFY13 gross profit margin (GP) improved significantly in 9MFY13 to 20% from 15%  in 9MFY12.  However, the higher staff and other operating costs were mitigated by  a  MYR5.5m gain  on the sale of property, plant & equipment in 9MFY13.    
• Outstanding orderbook  estimated at  MYR2bn. AMRB  has  secured  a contract for the provision of a straight supply vessel (SSV) to an oil & gas (O&G)  company,  which  boosted  its  estimated  orderbook  to  MYR2bn. Given  the  tightening  supply  of  vessels  in  the  Malaysian  market  and growing  demand  due  to  more  contracts  potentially  being  awarded  by Petronas,  we  believe  AMRB  stands  to  be  one  of  the  biggest beneficiaries, thanks to its large fleet of vessels.  
• Bidding  for  Package  A  of  Pan-Malaysian  transport  &  installation (T&I)  project. AMRB  has  been  qualified  to  bid  for  the  first  of  the  five packages on its own. We understand that it may also qualify for the other four packages by  leveraging on its partner, Swiber Holdings (SWIB SP, NR). We believe that AMRB has a high chance of winning Package A as it  has  a  fleet  of  other  supporting  Maintain BUY, with MYR2.25 FV. We nudge our FV higher to MYR2.25 from  MYR2.00,  at  an  unchanged  target  FY14  P/E  of  14x.  We  revise higher  our  FY13  and  FY14  earnings  estimates  by  15.6%  and  10.1% respectively to reflect improved contribution from JCE. We  believe that AMRB will be able to  maintain its  high vessel utilization rate given that more T&I projects that require the use of its vessels may be awarded.

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Alam's principal activities are in the provision of offshore marine support services.

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Source: RHB