People always blame ruling party practice corruption. I think corruptions also prevalent among IBs analysts. Perhaps Uzma management treat them very well hence the high TP. But not everything is free in this world. The money spent will be reflected in Uzma profit and loss account.
ADD, TP RM2.56, RM1.69 close 50% of revenue comes from its POOS division, which focuses on production services. It should benefit from full contributions from the Tg Baram marginal oilfield RSC and D18 Water Injection Facility contracts in 2016.
Write a comment..Uzma receives fishing services award TheEdgeFri, Mar 24, 2017
This article first appeared in The Edge Financial Daily, on March 24, 2017.
Uzma Bhd (March 23, RM1.80) Outperform reaffirmed with a target price (TP) of RM2.03: Uzma Bhd has received another award from Petronas Carigali Sdn Bhd via its wholly-owned subsidiary, Uzma Engineering Sdn Bhd, for the provision of fishing equipment and services.
This two-year contract with an extension option of one year is on call-out terms, and therefore does not constitute a commitment for any specific work. The award nevertheless reflects potential work orders and thus continues to reaffirm our “outperform” recommendation with a TP of RM2.03 based on a 13 times multiple to financial year ending Dec 31, 2017 forecasted (FY17F) earnings per share (EPS) of 15.6 sen
The contract will run for a duration of two years, from February 2017 to February 2019, with an extension option of one year for fishing services across Petronas Carigali’s area of operations.
Fishing services refer to well workover and intervention activities. It is the application of techniques, tools and equipment for the removal of debris or excess material from a wellbore. The fishing operations include an understanding of the dimensions and nature of the “fish” to be removed, the wellbore conditions, tools and techniques employed, and the process by which the recovered “fish” will be handled on the surface.
The execution of the contract depends on work orders to be issued to Uzma when services are required. We therefore maintain that our order book replenishment assumptions of around RM70 million per year at this juncture has sufficiently provided for this contract.
We are encouraged that Uzma’s activities pickup is a signal of recovery for the group, reaffirmed by a slew of new awards which the group has secured to date in 2017. We maintain our “outperform” call on Uzma with a TP of RM2.03 based on a 13 times price-earnings ratio multiple to FY17F EPS of 15.6 sen.
The group’s performance continues to be supported by its around RM2.6 billion order book and tender book of around RM2 billion to last up to 2019. — PublicInvest Research, March 23
KUALA LUMPUR (May 5): Uzma Bhd has proposed to place new shares to third party investors to be identified later to raise up to RM50.62 million mainly for capital expenditure and future developments and/or investments.
The remaining proceeds will be used for bank borrowings repayment (29.63%), working capital (9.63%) and estimated expenses relating to the proposed private placement (1.48%), said in a bourse filling today.
The private placement will involve up to 29.09 million new shares or 10% of its total number of issued shares, at an issue price to be determined and announced later, said Uzma.
As at April 21, Uzma has a share capital of RM145.47 million comprising 290.94 million shares.
Uzma said the issue price of each tranche of the placement shares shall be based on the volume weighted average market price (VWAMP) of Uzma Shares for the five market days immediately prior to the Price-Fixing Date, with a discount of not more than 10%.
For illustrative purposes, the five-day VWAMP of Uzma Shares up to and including May 4, 2017 is RM1.8329 per share, said Uzma.
“The illustrative issue price of RM1.74 per placement Share represents a discount of not more than 10% to the five-day VWAMP of Uzma Shares,” said Uzma.
Subject to the relevant approvals being obtained and barring any unforeseen circumstances, the company expects the proposed private placement to be completed by the third quarter of 2017.
Shares in Uzma closed up four sen or 2.27% to RM1.80 for a market capitalisation of RM523.68 million.
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