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Alam Maritim Resources - Recovery is intact

We remain positive on ALAM after our recent meeting with management as its recovery story is still on track. ALAM is targeting the release of its 1H12 results in mid-Aug and is guiding for a doubling of its net income to c.RM15m in 2Q12. Although this brings 1H12 earnings to c.RM22m, which only accounts for c.38% of our full year estimate, the bright outlook for the stock is intact as we expect a stronger 2H12. This will be on the back of sustainable vessel utilisations and the recognition of the SOGT project in the later part of the year. We have trimmed our FY12E earnings by a marginal 5% (as we assumed a slight delay of its new vessel deliveries) but are maintaining our FY13-FY14E forecasts. Based on an unchanged 10x targeted PER on FY13 EPS, we are keeping our target price of RM1.14 and our OUTPERFORM call on the stock.

2012 turnaround story is on track. Management guided for a better set of results in 2Q12, with net profit doubling to c.RM15m (from the RM7.3m reported in 1Q12). The main drivers of the improvement were 1) higher contribution from JVs and associated entities and 2) better OIC segment earnings as it achieves a breakeven in 2Q12. Recall that in 1QFY11, the segment posted an operating loss of RM1.1m.

Looking to a stronger 2H12. As mentioned above, while the upcoming 1H12 results will only make up c.38% of our full year estimate, we still believe that 2H12 will be stronger on the back of 1) healthy vessels utilisation rate (within the 80% utilisation assumed for the year) for the Offshore Supply Vessel (OSV) division and 2) execution of the remaining RM10m from the SOGT project in the Underwater Services (US) segment where it is set to be recognised in 2H12 as SOGT project is now 70% compled.

Order book stands at RM570m. 70% of ALAM’s order book are from the charter contracts of the OSV division and the remaining is from the US. We believe the JV vessels are the main contributors of the RM400m OSV order book (60% long term and 40% spot contracts). For the US segment, it has an order book of RM170m, which mostly comes from its OIC division.

At least RM1.3b tender book. another c.RM100m worth of OSV this in our FY13E forecast as we securing it. For the US segment, worth of jobs.

New international prospects? Besides the domestic tenders, we believe its latest JV entity in Saudi Arabia is also seeking for new works. However, we have not imputed any earnings contribution from this new JV entity given that it is still in the preliminary stage. To recap, in our previous report, we mentioned that this JV company was incorporated to undertake projects providing marine construction-related and marine services in Saudi Arabia.

Trimming FY12E forecasts but keeping call unchanged. We are trimming our FY12E from RM62.1m (-5%) to RM58.7m as there are 2 vessels (12,000 bhp) are only to be delivered in 4Q12 & 1Q13 from 2Q12 previously for both vessels. However, we continue to maintain our FY13E-FY1E estimates as our assumptions for 80% utilisation rate and RM400m annual replenishment jobs are maintained. ALAM is in the midst of tendering for contracts. We have already imputed are pretty confident in the company ALAM is bidding for at least RM1.2b

Risks. Our main fears for the stock are 1) Lower-than-expected OSV utilisation, 2) Further delay in the SOGT project which will skew our 2HFY12 aspirations and 3) Low rate of project replenishment for 2013 onwards, which will put our forward earnings at risk. In order to mitigate these risks, we believe that ALAM will continue to be busy in contracts bidding to boost its OSV and US businesses. To recap, ALAM won two big long contracts for total value of RM250m from the big players in 1H12.

Reiterate Outperform. At an unchanged target PER of 10x on FY13 EPS of 11.4sen, we are maintaining our target price at RM1.14 with an OUTPERFORM call on ALAM. Our target PER is slightly below its historical 6-year forward trading PER of 11.2x. We believe this is justifiable given the above highlighted risks.

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2012-08-10 06:38 | Report Abuse

next week boleh dpt duit raya from this counter.....

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Stock: [PERISAI]: PERISAI PETROLEUM TEKNOLOGI BHD

2012-08-08 13:06 | Report Abuse

his company will be announcing their earnings in the next 2 weeks.

VOLUME wise more and more instituitional investors accumulating PERISAI after analysts start covering this stock last week.

Yesterdays the share managed to tick up to 93sen crashing out all sellers at 92.5sen. No doubt 93-95sen will be plenty of sellers I believe net buyers will be taking positions soon as the earnings draw nearer.

Not only investors anticipating earnings I believe more contracts renewal will be in place this coming months making this stock very active in the market.

Take position now and keep in for a few more weeks.

Happy investing!

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Stock: [PERISAI]: PERISAI PETROLEUM TEKNOLOGI BHD

2012-08-02 13:01 | Report Abuse

Persiai advances to highest since mid-July

KUALA LUMPUR: Shares of Perisai Petroleum Bhd advanced to 92.5 sen on Thursday, the highest since July 19 as interest in the small oil and gas (O&G) player perked up.

At 11.14am, it was up three sen to 92 sen. There were 13.81 million shares transacted at prices ranging from 91 sen to 92.5 sen. Perisai's highest was 98.5 sen on Feb 17.

The FBM KLCI fell 0.04 of a point to 1,632.43. Turnover was 460.87 million shares valued at RM356.35mil. There were 209 gainers, 326 losers and 279 counters unchanged.

CIMB Equities Research has an Outperform recommendation on Perisai with a target price of RM1.53.

"We continue to value the stock at our CY13 target market price-to-earnings (P/E) of 13.3 times. Perisai remains an Outperform and our top small-cap oil & gas pick. A potential record 2Q performance and fleet expansion support our recommendation," it said.

The research house said Perisai's mobile offshore production unit (MOPU), which was servicing a 2+1+1 contract at Petronas's Bekok-C field, was the main talking point during its recent meeting with the managing director Izzet Ishak.

CIMB Research said the field's damaged platform, which the MOPU is temporarily replacing after a fire in 2010, will be refurbished and reinstalled, but the impact on Perisai, if any, is likely to be felt only in 4Q14.

"Separately, management is negotiating with Emas Offshore on contract renewals for five vessels and is confident of continued charters. Also, Izzet has emerged as the company's fourth-largest shareholder with a 7.8% stake," it said.

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Stock: [PERISAI]: PERISAI PETROLEUM TEKNOLOGI BHD

2012-07-30 10:30 | Report Abuse

http://www.btimes.com.my/Current_News/BTIMES/articles/ong29/Article/

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