Suit yourself.
Your money, your call.

Another strong quarter coming with Kraken at >90% efficiency and 18m/quarter Perdana full savings.

Post Q4 and full year 2019 results - below 40 cents would be almost impossible.

Tide is turning.
Coronavirus fears receding.
Quarantine measures globally are working.
People's panic buying of masks and use of sanitizers and awareness are slowing the spread.
China has started work again - oil demand will resume.
Oil price is coming back.
OPEC+ might cut further to boost oil price.

The time is now. Buy.

https://www.channelnewsasia.com/news/business/oil-prices-rise-as-new-virus-cases-slow--easing-chinese-demand-concerns-12425492

"Oil prices rose for a second day on Wednesday amid preliminary signs that new coronavirus cases are slowing in China, easing concerns over the demand impact from the disease in the world's second-largest oil consumer."

The undercurrents are turning.
The # of new cases in China are reducing back to around 2k a day from 3.5k.
The quarantine measures are starting to work.
Meanwhile OPEC+ is in the works to further cut oil production.
Don't be shortsighted and only look at what's happening today.
Think 2 steps ahead on what's gonna happen in 2 months.
Easy buy call.

https://simplywall.st/stocks/my/energy/klse-armada/bumi-armada-berhad-shares/news/an-intrinsic-calculation-for-bumi-armada-berhad-klsearmada-suggests-its-35-undervalued/

Simple DCF - intrinsic equity value of Bumi Armada is around RM3.5bn or RM0.60 per share.

Maintain strong buy.
Coronavirus fears are starting to get old.
Market is turning soon.

Short term TP RM0.60 by Q2 20.

RM0.80+ once kraken write back + constructor & installer deployed.

2x money possible by end 2020.

All the best.

DBS - Malaysia Strategy Report.
Top Pick: Bumi Armada TP RM0.75

Summary:

"Expect stellar 4QFY19 results, lifted by its FPSO business. OSV business recovery is also expected to boost its profits coming from the OMS segment."

Russia however blocks opec’s response for further cuts for coronavirus up to an additional 1m barrels, saying it’s too early to tell the impact on oil demand. A bit of a letdown.

China halves tariffs on US$75bn US goods as a sign on goodwill. To take effect in mid Feb. good signs on further de escalation of trade war.

Based on Enquest’s latest announcement - Kraken’s write back is just a matter of time.

We now have all FPSOs fully online and optimized to generate maximum cash flow.

Slowly but surely, each quarter debt will reduce, and balance sheet gets stronger and stronger, and share price gets higher. This is a direct cause and effect relationship, not sentiment based. This is the main engine that will drive share price increase over the next few years.

And this is obviously not priced in yet at 0.41 due to irrational short term panic of Claire + Coronavirus. Suddenly market ignores operating cash flow and taken over by negative sentiments. But these too, shall pass over time when everyone comes back to their senses and realize how needlessly panic they were.

Time, patience, guts of steel = $

bullrun1985, thank you for your keen and sustained interest in speculating what I have or have not done. Very flattered.

As a quick update to bullrun1985 on what I have done today so far - I drank a black coffee and ate a banana this morning, am thinking of having chicken caesar salad for lunch now. I also tried to take a dump at 11am but nothing came out, that's why I ate a banana to increase fibre intake.

More material updates to come soon, possibly after I successfully take a dump.

From bullrun1985:

Feb 1, 2020 5:43 PM
Mikekim and IK extremely quiet now. I think they may sell off their shares in advance on Next Monday. buy on dip method should be buried under the armada ship.
its too late liao as next monday will gap down 3 cents. but might pull back to 0.355 in the afternoon. who knows

Feb 2, 2020 9:17 AM
Mikekim is not real or juz a troopers or so called operator. he extremely quiet this 2 days, many ppls kena trapped becoz listen to his buy on dip method. especially RJ87, a high ambitious and ego like to fight person, end up with his karma, all of his money including margin may gone for this time

Feb 3, 2020 10:14 AM
I predict The Mighty Mikekim will come out say something soon

Feb 4, 2020 1:49 PM
RJ87, how many shares you bought today? your 2 bros Mikekim and IK missing in action, may be they will come out after the price over 0.45

Feb 6, 2020 11:47 AM
Dai Gors here may surrender their shares to sharks, thats why armada rocket up. most likely the shares contributed by IK and Mikekim

Enquest share price spiked 7% at opening following this operations update.

Basically, the takeaway is Kraken’s performance in 2H2019 is excellent and above expectations, with >90% production efficiency consistently. This is a fact.

https://www.enquest.com/media/press-releases/article/operations-update-5

Kraken
Average gross production in 2019 was 35,704 Bopd, above the top end of guidance. Performance at the FPSO vessel significantly improved through the year following a programme of targeted improvement initiatives. Overall subsurface and well performance was strong, with optimised production through improved injector-producer well management.

Letsfly - it’s today’s announcement by Enquest.
Go to their website and see operations update.
It’s 4 Feb 2020 update.

"I am delighted with the progress we have made at Kraken and in strengthening our balance sheet."

"Kraken performed above expectations - 35,704 Bopd in 2019, above the top end of guidance reflecting improved FPSO performance"

While many people like to speculate what other people do here, I'll provide some useful, factual updates on Kraken. CEO of Enquest commented that Kraken's performance has been excellent, with production efficiency above 90% for much of 2H2019.

Enquest operations update (4 Feb 2020):

2019 performance
Production up c.24% year on year, driven by Magnus acquisition and improved Kraken uptime

Average Group production was 68,606 Boepd; towards the higher end of guidance of 63,000 to 70,000 Boepd

Continued strong performance at Magnus, with production efficiency of more than 80% combined with enhanced reservoir management, well interventions and plant debottlenecking

Kraken average gross production of 35,704 Bopd was above the top end of guidance reflecting improved FPSO performance.


EnQuest Chief Executive, Amjad Bseisu, said:

“The Group has again delivered on its operational targets, growing production by 24%. Kraken performance in particular has been excellent, with production efficiency above 90% for much of the second half of the year.

I'm here, always been here - reading all these comments with great amusement.
I would recommend further speculations, predictions and obsessions over what I have or have not done :)
Reminds me of the infamous Pearlwhite who concluded after much investigations that I was a Corporate Finance Manager at Usaha Tegas haha.


From annie87:

Feb 2, 2020 10:46 AM
Mikekim will say that he sold off all his shares due to current market condition. He will buy back until further notice. watch out

Feb 3, 2020 10:25 AM
from today share crisis, I notice RJ87, Panda and Paktua are good guys. Mikekim and IK actually holding zero shares, when the shares up, buy on dip buy on dip, when the shares down, disappear. now the shares up back, they might come out say something good about armada


From bullrun1985:

Feb 1, 2020 5:43 PM
Mikekim and IK extremely quiet now. I think they may sell off their shares in advance on Next Monday. buy on dip method should be buried under the armada ship.
its too late liao as next monday will gap down 3 cents. but might pull back to 0.355 in the afternoon. who knows

Feb 2, 2020 9:17 AM
Mikekim is not real or juz a troopers or so called operator. he extremely quiet this 2 days, many ppls kena trapped becoz listen to his buy on dip method. especially RJ87, a high ambitious and ego like to fight person, end up with his karma, all of his money including margin may gone for this time

Feb 3, 2020 10:14 AM
I predict The Mighty Mikekim will come out say something soon

Feb 4, 2020 1:49 PM
RJ87, how many shares you bought today? your 2 bros Mikekim and IK missing in action, may be they will come out after the price over 0.45

Beautiful opportunity to triple down.

6 months from now when everything blows over - we'll have a lot of coronavirus millionaires, just like when SARS was over.

But of course, it takes guts.

Oh pearlwhite.

The one who made an official announcement that I was the Usaha Tegas Corporate Finance Manager after verifying with multiple sources.

Decimated and buried long time ago =P

spinninglotus -

Mr. Joker "Armada By Law Cannot Appeal" and
Mr. "Deleted Comments Due to Embarassing Stupidity"

I can't be bothered to respond and engage with someone who deletes and has no guts to stand by their comments after they make embarassing mistakes and comments. That's the ultimate move for a coward, I have no counter for that, so you win I guess.

Thanks. Point taken. Wide awake and I’m aware and am confident on what I’m doing. We just have different strategy. No denying sentiment is extremely weak and it could tank further. But can’t help but buy in panic sell situation. This strategy has never failed me in the past 5 years, given enough time and holding power.

Coronavirus is a one-off short term event.

Take advantage of panic selling.

In a month’s time, virus contained, vaccine out, oil price rebounds, OPEC cuts more, share price rebounds.

These kind of one-off short term systemic shock has happened so many times. And so many times people still panic sell. Guess it’s human nature can’t be helped. The only thing I can do is to continue to accumulate on dips and average down, and enjoy the upwave once it resumes.

Fingers crossed and goodluck.

Jonathan from BA has confirmed to me that they will provide an update in the upcoming quarterly result in Kraken’s debt reclassification from ST to LT.

So stay tuned and hopefully no more short term liquidity risk for BA.

Enquest full year 2019 operations update likely announced next week. It was announced 5 Feb 2019 last year.

Expect further improvements to Kraken uptime.

Higher Kraken efficiency
= higher charter revenue + no need to pay further penalty & repair capex
= stronger cash flow
= lower debt
= higher equity value
= higher share price.

Just assume the worst - EPF disposing all their shares gradually to 0%.

They started to dip below 5% (300m shares) on 21 Jan.

Assuming they dispose 10m a day on average, the overhang will last around 30 trading days until end Feb. So the worst case scenario for me is this drags on for another month, but that's about it.


Thereafter, idiots like EPF will be completely gone, and the sky is clear.

See the big picture. The worst is over. The future is getting brighter with Kraken and OMS improvements. So will the share price.

What other downside risk can BAB have now apart from further contract repudiation by clients and Kraken’s problems coming back again? Once Kraken’s technical issues are solved with improvement capex - it’s likely to stay that way. It’s mechanical and engineering based, not biological. It’s unlikely for Kraken to “fall sick” again - unless it’s adverse weather related which is covered by compulsory insurance anyway.

The price has taken a heavy beating - 30% from its peak. Do we really expect share prices to halve just because of Claire’s court case which has zero impact to operations? Fund managers will soon come to their senses once global sentiment strengthens, coronavirus is over, and oil prices rises again. OPEC may move meeting earlier to Feb to discuss cut extension and deeper cuts.

The Jan sales is going to be over soon. Move fast before Feb strikes.

DBS Report Excerpt - makes a lot of sense.

We believe that the worst for BAB is over. The company has resolved its debt issues and is improving its operations progressively as seen in 9MFY19 figures. Earnings are expected to be stable going forward. The company is focusing on improving its existing operations and is not planning to venture into any new projects until it lowers its net gearing significantly.

3-4 more quarters of 90-100m net profit, sustainable Kraken improvement and write back and higher OSV utilization, why not?

Summary of research reports that I have access so far.
Feel free to add on.

Kenanga: UPGRADE to BUY TP RM0.53
RHB: Maintain BUY, TP RM0.61
CIMB: Maintain BUY, TP RM0.61
Jefferies: Maintain BUY TP RM0.63
JP Morgan: Maintain BUY TP RM0.65
DBS: Maintain BUY TP RM0.75

Average TP: RM0.63

and if there's a person who has fantastic market timing record on this forum, I would say it's paktua73. He re-emerges whenever there's a red sea, buying ferociously. and takes profit when the share price spikes over a short period of time.

There's a plan and discipline in execution in his form of short term trading - not fearful to strike when it's low, not greedy and sell when it spikes.

It's not something I do - I've always been a long term holder with a TP of RM0.80 - 1.00 which I believe is a fairer price for Armada.

I simply do not have the market timing skills of the many more experienced market timing speculators here. But for the short term traders - there's a thing or two to learn from paktua73.

and he's calling BUY now ;)

But as usual, your money, your call.

Going into consolidation phase - similar to when it was RM0.15.

No one wants to buy aggressively, no one wants to panic sell, just low volume, quiet and flat.

And out of the blue, you went to eat breakfast one day and you check your phone, it's back to RM0.46, and the next day RM0.50.

If there's one thing that I have learnt from Armada's share price movement over the years, it's the share price's tendency to suddenly go crazy in a quiet day with no newsflow. The implication is that I can never time the share price movement, the only thing I can control is to buy ferociously when no one wants to buy. And sell when it reaches my personal TP.

Continue to buy on dips. And buy ferociously when no one else wants to buy.

Another weak attempt to abruptly change the topic to avoid further embarassment.

What has this suddenly to do with Kenanga, 53 sen TP, therefore dumb dumb buy, and therefore no need to weaponize?

Cantonese has one saying - 9 mm dap 8.

Double thumbs up again for malglish lawyer i3lurker logic.

I shall not bother to respond to stupidity and pathetic come back any further, lol.
You win hands down, malglish lawyer i3lurker.
Double thumbs up.

Wrong again. I am Malaysian. Born and bred.

If the statement is obviously wrong and doesn't make sense - just own up and said yeah it's wrong and misleading.

Don't go around saying that it's "Malglish" or rubbish like that and disgracing Malaysians.

Lol, another one trying to weasel their way out after typing something misleading and categorically wrong.
.
Comments should be based on facts, accuracy, objective and not misleading.

"by law, armada cannot appeal" is just the stupidest thing I have heard in a while and yet someone wants to justify this as "redacted output" that's not meant for "non-lawyers". I can't help but chuckle at such a sad comeback. Good try I guess...

I apologize to myself for wasting my time to respond to rubbish like that.
Shall not make the same mistake going forward.

Did spinninglotus delete his comments?
Gosh, if you typed something wrong and misleading, at least have the guts to own up to it.
Deleting your comments is just cowardice.
Oh well. I guess that ends the matter and move on.

And with your accusation that I did not read the content of the judgement, you’re so wrong again.

I said that your statement “by law Armada cannot appeal” is fully wrong.

Armada has the right to appeal. By law they CAN file the appeal and the court of appeal will hear it. That’s why Armada is saying that they’re considering it. If by law they can’t, they won’t make such an announcement.

What you should say instead is - even if Armada files an appeal, they cannot win. If that’s your statement - there will be some merits to it. If you read the judgement, Armada’s previous management fucked up basically.

In day 1 of the trial, they said they have completed all the acceptance test, including the OET. In day 3, BA retracted that statement in trial, and said that by virtue that Woodside continued to work with BA although final acceptance deadline has passed means they have accepted BA’s failure and choose to continue to work together, therefore waiving their rights to terminate.

And the BA’s previous management misrepresented this to investors and said that they have reasonable grounds win damages. So I think woodside was right - Armada’s damages claims were ridiculous. And if they go to the court of appeal. They will still lose.

So this is not “by law armada cannot appeal”.

It is “by law armada can appeal, but very unlikely to win the appeal”.

Understand how to write in non misleading English now?

Read my statement properly.

I said that the court award and Claire’s book value is unrelated. Claire’s book value is not derived from the value of any potential court award.

Claire has been idle since 2016 and has been substantially impaired in 2016. The remaining book value was estimated to be US$100m after impairment. Since then, every year, the vessel is depreciated.

The auditors can impair the remaining book value of Claire anytime in 2017,2018,2019,2020,2021,2022 and so on on the grounds that it’s idle and doesn’t generate cash flow, and has 0% hopes of redeployment.

Losing the court case has no relationship at all to the redeployment ability of Claire and its ability to generate cash flow. Similarly, winning the court case also has no effect on Claire’s redeployment ability. There is no relationship at all. Zilch.

On this basis, there is no reason for the auditor to specifically want to impair Claire suddenly in Q42019. Does losing the court case has anything to do with Claire’s potential to be redeployed to generate cash flow? A big fat no.

The auditors can impair Claire anytime before or after the court announcement. Or years later. They are independent events. But judging from the booming FPSO demand now, there’s a better chance to redeploy or sell Claire at a fair value. Definitely better than 2017 and 2018. On what basis should the auditor impair Claire in a better FPSO and oil price environment in 2019, when it did not do so in 2017/2018 when oil price was at $40 and FPSO demand was much lower?

That’s what I’m saying if you bother to read carefully. And to actually use your brain to think logically.

Logically, Claire’s book value has nothing to do with the court award.

Even if BA won, say US$200m in cash - how does that affect Claire’s book value which is estimated to be US$100m? Claire’s book value will not be written up. The gain of 200m is in cash, not increase in PPE value.

If Armada wins 200m cash from wood side and subsequently decides to scrap Claire, then you will still have an impairment - loss on disposal of vessel.

If Armada wins 0m from Woodside in cash and sells Claire for 100m, it will not have an impairment. It will only have an impairment if the price sold is below book value.

Again, I reiterate, the court award has nothing to do with Claire vessel book value at all. They are 2 separate things. Don’t be confused.

The statement “by law Bumi armada cannot appeal” is categorically wrong.

Bumi Armada has announced that it will consider whether to appeal. It is their right to appeal. Whether they will win is another story.

So please get the facts right instead of spewing nonsense.

P/E is not the best metric, because they have different leverage levels.
EV/EBITDA or P/B are the more correct ratios to compare.

Even then, Armada's adjusted P/B (asssuming Kraken write back) is less than 0.5x while Yinson is >2x.

6/6 banks with released reports calling BUY so far.

Kenanga: UPGRADE to BUY TP RM0.53
RHB: Maintain BUY, TP RM0.61
CIMB: Maintain BUY, TP RM0.61
Jefferies: Maintain BUY TP RM0.63
JP Morgan: Maintain BUY TP RM0.65
DBS: Maintain BUY TP RM0.75

CIMB report released. Extremely detailed report with 18 pages.
Maintain BUY call with TP RM0.61.

I'm buying.

Here I am. I said buy on dip. and I continue to buy on dip.

I maintain my views, I don't disappear from the forum when price dips, I don't gloat when the price spikes.

To summarize:

5 banks so far have similar comments - small net gain of RM5m, no impact to operations.
BUY call with TP ranging from RM0.53 to RM0.75.

Jefferies: Maintain BUY TP RM0.63
JP Morgan: Maintain BUY TP RM0.65
DBS: Maintain BUY TP RM0.75
Kenanga: UPGRADE to BUY TP RM0.53
RHB: Maintain BUY, TP RM0.61

I will update further when there are more research reports released.
These are the facts and recommendations.
Your call whether to follow or not.
Good luck.