Yinson has been sliding and sliding past few days. Perhaps investors are repositioning their portfolio to a more promising and undervalued stock ;)

Trust your guts, buy the shares from profit takers and risk-adverse shareholders who want to sit this out to avoid volatility in the next 2 weeks. There will be a group of these people - nothing wrong with their investment strategy, just sitting on the opposite site of the fence, but a real opportunity will be there.

Q3 should be out in less than 2 weeks.

New CEO has guided that 3Q and 4Q should be stronger than 1Q and 2Q which were already excellent. He's putting his credibility on the line here to make this statement, especially as a new CEO. He also got his stock options at around 20+cents If I remember correctly, and thus have all the incentives to report a better quarterly results in 2H2019. When money, incentives, reputation and self-interests are aligned with company value - we are likely to see improvements.

Relax, keep calm, and continue buying on temporal dips.

https://www.energyvoice.com/oilandgas/north-sea/211364/enquest-working-on-many-potential-solutions-for-stricken-north-sea-rig/

Enquest working on a range of many solutions available for Thistle platform. Unrelated to kraken, but just FYI.

the stock is still trading at below 1x P/B. and recall that the denominator - B has been heavily impaired in 2018 for Kraken, more than 2bn.

With kraken's improvement, if we roll back the impairment, BA is trading at an adjusted 0.49x P/B.
Yinson is trading at >2.0x P/B.

Why the discrepancy? Fear of distress from balance sheet debt.

Is the fear overblown? Yes, with the current improved cashflow and debt repayment profile - there is no more liquidity risk. When Kraken cashflow improves together with bonus claire payments and higher OMS cashflow from higher utilization, debt will be pared down even further overtime.

So, mathematically, the share price is an inverse function of the fear of financial distress.
The lower the fear, the higher the share price.
Think along these lines when you assess the next news that comes out - does this news reduce the fear of financial distress? Then you have better clarity on what to do.

madcow78 - makes lots of sense. agree on the one-off gain part fundamentally. it's more of a headline sentiment effect that is needed to catalyse more positive feelings into armada to correct the current undervaluation. investors need a reminder that armada is significantly stronger fundamentally with proactive steps in disposing idle vessels like Perdana, generating cash to pare down debt, making a gain on disposal, while simultaneously saving on substantial vessel maintenance opex.

longer term - in terms of business operations - two key things are required:

1) bring up kraken uptime to 99% (similar to other FPSOs)
2) improve OMS utilization - installer + constructor deployment (IK) and other OSVs possibly for petronas jobs

Claire compensation up to US$283.5m will be icing on the cake. If we get the full amount, there will be no more risk of financial distress to BA - risk premium in cost of capital will reduce, increasing company value. multiple will rerate accordingly too.

When all the above happens, we're ready to revisit BA's glory back in 2014.

The low volume profit taking suggests the sellers are probably retail - maybe moving over to punt at Velesto and then coming back later closer to Q3.

Either way, the possibility of Q3 profit higher than Q2 profit is higher than otherwise. that's the bet im playing on.

but it depends on how management wants to play this.

they may want to split the gain recognition evenly across Q3 and Q4 to smooth out earnings.

Otherwise we have a very high spike in Q3 from one-offs and then goes back down slightly in Q4 - management usually wants to avoid that. they tend to want to show a consistent profit growth quarters after quarters.

madcow78 - that makes sense, thanks. nonetheless i think the 21m gain on disposal will still be recognized.

so we're still looking at close to 100m net profit, sans the contribution from further kraken improvement and additional 3-4 OSVs deployment in Malaysia.

100m net profit is a psychological threshold - if BA is able to show this in Q3, the headlines will look very positive.

Boring, boring, boring, spike.

Disagree.

A Q3 net profit growth to above 100m, with 3 consecutive quarters of sustainable net profit will catalyze further rerating and give institutional funds a reason to buy in more.

And if this sustains to Q4, it will produce a sparkling set of FY2019 full year number that will definitely rerate the stock valuation multiple.

On a ceteris paribus basis, Q3 net profit estimate

Q2 net profit (78m) +
Gains from Perdana Sale (21m) +
Maintenance Cost Savings from Perdana (18m) +
Kraken further improvement (xxx m) +
Additional contribution from 3-4 OSVs deployed in Q2 (yyy m)

= Up to RM117m + xxx m + yyy m

Possibly the strongest quarter in years.

Relax, keep calm and continue buying on temporal dips.
Q3 report in less than 20 days.
In the past 5 years it was released around 20-23 Nov.

Feel free to bet on the volatility these 2 weeks and time your entrance at a low point if you have the skill. There may be a chance to buy when risk adverse investors want to sit out quarterly reporting season and take profit etc.

But I'd suggest to try to do this before 20 Nov. Chasing the stock after QR is released is going to significantly nerf returns that you'd get should you have taken the risk prior to QR release. But that's up to you of course.

Funds may start to enter in anticipation of a strong Q3 profit.

This time round the run up may happen before Q3 release since everyone expects a strong Q3.

And when a good Q3 is announced the run up will be good but not a crazy spike as it could be priced in in the coming 3-4 weeks.

Make your call, good luck. And remb to see the big picture that this is a turnaround story.

https://www.energyvoice.com/oilandgas/north-sea/210915/global-ec-wins-brownfield-contract-with-enquest-in-north-sea/

More contract award for North Sea by Enquest. The deal covered all construction-related activities on the Thistle, Heather, Magnus, Northern Producer and EnQuest Producer installations.

Seems like Enquest preparing to ramp output.

Relax, keep calm and continue buying on temporal dips.

This is a big turnaround story and we’re just at the beginning of price recovery (1-2 months).

2-3 years later when you see the last 3 years price chart, you will get the big picture that today we’re just at the bottom of a very high upward slope.

Relax, keep calm and continue buying on temporal dips.

This is a big turnaround story and we’re just at the beginning of price recovery (1-2 months).

2-3 years later when you see the last 3 years price chart, you will get the big picture that today we’re just at the bottom of a very high upward slope.

It could remain range bound for a while for the market to establish that 0.40-0.42 is the support level, then upwave will resume closer to Q3 announcement with higher consecutive quarterly profits, potential Claire win (TAK1), potential armada constructor and installer contact win (IK), Kraken write backs, higher OMS utilization, further cost rationalization etc.

I think the market WANTS to buy Armada, it just needs a clear reason to (ie positive news flow).

Again, the key to generate the most alpha is to move in before things are crystal clear and 100% sure for every Tom Dick and Harry on the street. That’s the calculated risk you have to take.

At this stage, I would say that’s very favorable because downside risk is very limited. I mean unless Armada’s FPSOs snap into 2 or struck by the wrath of Poseidon, I don’t see any significant, high probability risk factor in play.

Kraken’s oil is selling at US$10 premium above Brent as it’s low sulphur sweet crude that could fulfill the IMO2020 compliance requirement.

Newsflow needed for breakout

Ok got it TAK1. Thanks. I'll wait for another week or so and see if BA announces anything.

This will the most material development that BA is withholding about Claire's award if it's true. It's super significant and material with US$283.5m compensation involved.

JP Morgan Upgraded Bumi Armada - New TP of RM0.50.


-----

BAB dropped ~17% today likely relating to confusion on Enquest’s Thistle Platform evacuation; BAB’s management confirms Kraken asset unrelated. Bumi Armada share price dropped ~17% today (vs FBMKLCI Index up 0.2%) potentially related to confusion on Enquest’s (covered by James Thompson) evacuation of its Thistle platform in the North Sea. News reports (Source: Upstream) stated that Enquest has carried out a major evacuation of 115 staff from its Thistle platform (located North East off Shetland) following a subsea structural inspection; however Bumi Armada management confirmed that the Thistle Platform is unrelated to the Kraken asset, where BAB’s FPSO is operational.


 Reiterate OW, look to accumulate BAB as we see the pull-back as an opportunity. We continue to remain OW as we see this pull back as a buying opportunity. We do remain wary of the elevated gearing (2.65x net debt/equity), however with Kraken operations now normalizing, we see these risks as priced in with the stock trading at 7.2x '20E P/E multiple with limited downside to earnings.

Any potential positive decision related to BAB-Woodside legal case (decision pending), in which BAB seeks $284mn, could be a key catalyst for the stock. The court decision is expected in late 2019.

CEO expects 2H2019 (Q3, Q4) to be stronger than 1H2019 (Q1, Q2).

We should at least hold until after Q4 2019 so Armada can produce a sparkling set of FY2019 results.

Those with more patience can hold until end of FY2020, 4 more quarters of net profit, and 2 consecutive years of net profit.

By the end of FY2020, I think it's about the right time Armada fully returns to its former glory. With at least 3x the share price today.

Bursa Rules Chapter 9, Part C.

Section 9.03 (1) and (3a)

A listed issuer must make immediate public disclosure of any material information, which may include:
​ ​
​(a)​ concerns the listed issuer's assets and liabilities, business, financial condition or prospects;​


Section 9.04 (a)

The following are some examples of events which may require immediate disclosure by the listed issuer:​
​ ​ ​
(a)​ the entry into a joint venture agreement or merger;


-------
FULL TEXT FOR REFERENCE BELOW


PART C – IMMEDIATE DISCLOSURE OF MATERIAL INFORMATION
​ ​ ​
9.03​ Disclosure of material information
​ ​ ​
(1)​ ​A listed issuer must make immediate public disclosure of any material information, except as set out in paragraph 9.05 below.
​ ​ ​
(2)​ Information is considered material, if it is reasonably expected to have a material effect on -
​ ​ ​
​ (a)​ the price, value or market activity of any of the listed issuer's securities; or​
​ ​ ​
​ (b)​ the decision of a holder of securities of the listed issuer or an investor in determining his choice of action.​
​ ​ ​
(3)​ ​Without limiting the generality of subparagraph (2) above, material information may include information which -
​ ​ ​
​ (a)​ concerns the listed issuer's assets and liabilities, business, financial condition or prospects;​
​ ​ ​
​ (b)​ relates to dealings with employees, suppliers, customers and others;​
​ ​ ​
​ (c)​ relates to any event affecting the present or potential dilution of the rights or interests of the listed issuer's securities; or ​
​ ​ ​
​ (d)​ relates to any event materially affecting the size of the public holding of its securities. ​


9.04​ Examples of events which may require immediate disclosure
​ ​ ​
The following are some examples of events which may require immediate disclosure by the listed issuer:​
​ ​ ​
(a)​ the entry into a joint venture agreement or merger;
​ ​ ​
(b)​ ​the acquisition or loss of a contract, franchise or distributorship rights;
​ ​ ​
(c)​ the introduction of a new product or discovery;
​ ​
(d)​ a change in management;​
​ ​
(e)​ the borrowing of funds​
​ ​
(f)​ the commencement of or the involvement in litigation and any material development arising from such litigation;​ FAQ 9.06
​ ​
(g)​ the commencement of arbitration proceedings or proceedings involving alternative dispute resolution methods and any material development arising from such proceedings;​
​ ​
(h)​ the purchase or sale of an asset;​
​ ​
(i) a change in capital investment plans;​
​ ​
(j)​ the occurrence of a labour dispute or disputes with sub-contractors or suppliers;​
​ ​
(k)​ the making of a tender offer for another corporation's securities; ​
​ ​
(l)​ [deleted]
​ ​
​(m) ​a change in general business direction;
​ ​
​(n) ​a change of intellectual property rights;
​ ​
​(o) ​the entry into a memorandum of understanding; or
​ ​
(p)​ ​the entry into any call or put option or financial futures contract.

Do you know the JV with China party - have they conclusively signed the contract award agreement?

If they have signed this and not disclosing this, something is very wrong.

It has been 12 days since IK posted the Armada installer and constructor award win on 18 Oct 2019.

If what IK says is true, once the award win is announced, we should consider writing to Bursa and SC highlighting this so that they can query Armada's management on withholding material developments and not announcing it.

I see, okay. I'll wait for that. Thanks for the info.

If this is true, this is a material announcement that BA is withholding information from the public and did not disclose this in a timely manner. and this is a breach of bursa rules.

TAK1:

There is no judgment issued by the Supreme Court of Western Australia where you alluded that BA won against woodside petroleum.

https://www.supremecourt.wa.gov.au/J/judgments.aspx

You mentioned that your source is internal staff announcement. But legally any announcement - whether internally or externally, cannot be done due to disclosure obligations of ongoing litigations.

Are you able to comment on this? Or send a link on the internal announcement (sensitive details redacted of course)?

IK:

I checked with Jonathan Duckett with regards to Armada Constructor and Installer award win that you stated. This is his response:

"If the Company has not made an announcement on any new contract of material value, then it can be assumed that the information provided by any individual on any forum or blog, is speculation."

Do you have any comments on this?

https://www.businesswire.com/news/home/20191029005985/en/Stork-Awarded...

Enquest awarded deck crew service contract for North Sea. Seems like business as usual for me.

Recall BA stock dropped from 49.5 cents to what it is today due to an UNRELATED thistle platform shutdown by Enquest that's hundreds of miles away from where Armada Kraken operates. Hence the mispricing.

I won't even bother trying to find the best timing for short term day trades. Maybe someone smarter out there can do it but I personally can't.

But if you're looking at 1-2 months horizon and beyond, it's really quite easy to time because it all boils back down to improving fundamentals.

and remember, see the big picture, this is a turnaround story with significant upsides and strongly improved fundamentals.

It's adjusting to its new norm at RM0.40+.
Typical trend for Armada is - boring, boring, boring, SPIKE 10+%.
You'll never know when the SPIKE comes.
So just accumulate on dips and wait for Q3.

No need to look at it minute by minute, just come back after Q3 and enjoy.

Relax, keep calm, and continue buying on temporal dips

Spot the trend:

0.255 => 0.22 => 0.355
0.355 => 0.32 => 0.495
0.495 => 0.42 => ?

Math question of the month, haha.

I can’t predict whether it will go up 3 bids or down 2 bids in the next minute, hour or day. But I’m pretty sure when Q3 results come out, the share price will be much higher than 0.42 today.

Love the puns, lol

https://ecourts.justice.wa.gov.au/eCourtsPortal/Decisions/Filter/SC/RecentDecisions?decisionDocumentType=All&appealType=All

No such judgments found.

if that's true then it's going to be 65 cents tomorrow.

US$285m compensation?

TAK1, source?

If Q3 net profit >RM80m, which is easily achievable, we will have 3 consecutive quarters of sustainable net profit.

Share price will move closer to RM0.50.

It's 15% discount at current price or 4 years worth of FDs return.

Still no announcement about Armada Installer and Constructor award as mentioned by IK 2 weeks ago.

Q3 QR in 30 days. 3 consecutive quarters of net profit.

Free money really. Relax, keep calm and buy on dips

Hmm still no announcement on Armada constructor and installer contract win as mentioned by IK.

This is very odd because this is a material development and BA has the duty for public disclosure ccording to SC rules.

Anyone managed to check with Jonathan Duckett - head of investor relations of BA?

Relax, keep calm and continue buying on temporal dips.

If Q3 net profit is 80m and above compared to Q2 78m (very achievable given kraken improvement and gain from perdana RM21m and savings from perdana maintenance RM18m), we'll see 50 cents.

Assuming you don't hold any shares today - this is a bet on probability of Q3 net profit being higher than Q2. And with all the recent developments I would say there's a very high chance. So make your call.

Relax, keep calm and continue buying on temporal dips.