Result Review/Update

SapuraKencana’s FY15 core earnings were below consensus expectations, but we believe its share price has priced in most of the negatives. We upgrade the stock to NEUTRAL (from Sell) and lift our TP to MYR2.34 (2% upside) from MYR2.20. While we cut our FY16F/FY17F earnings forecast by 23%/25% to account for challenges in margins/topline, we anticipate a more positive environment over the next 12-18 months.

Source: RHB Research - 25 Mar 2015