We maintain BUY on Keyfield. The Group announced purchase of a platform supply vessel (PSV), in line with our fleet expansion thesis. Though our sensitivity analysis presents a +7% to our FY25F core net profit (CNP), we maintain our forecasts for now pending acquisition of a charter contract for the vessel. With sufficient headroom for funding, we believe Keyfield is still in pole position for further fleet expansion initiatives in the near term. Our target price (TP) of RM3.25/share is based on CY26 PE of 10x, at par to the local OGSE average. The Group currently trades at a compelling 1-yr forward PE of 7.4x.

• First purchase for the year in PSV space. Keyfield announced that it is acquiring a ~5-year-old China-flagged PSV with a dynamic positioning 2 (DP2) mooring system for a purchase consideration of US$17.6mil (RM79.2mil) (name: Keyfield Gratitude, Exhibit 2). Additionally, the group will also incur costs amounting to US$2.2mil (RM9.0mil) for the purpose of inspection, dry docking, delivery expenses and conversion of the vessel into Malaysian-flagged upon completion of the purchase. The vessel has an accommodation capacity of 59 passengers, including crew members. Delivery is expected in February, whilst the latter process is expected to be completed by June at the latest.
• Positive on acquisition, expect bumper growth potential for FY25F at fair price. We are positive on the acquisition as the PSV space is lucrative with tight supply. According to our checks, there are only 10 PSV vessels in Malaysia as at end-Dec 2023. We believe the situation remains the same as no other acquisitions or newbuilds within this category has been announced by other local charterers or shipbuilders. Assuming revenue per day of RM100k and a utilisation rate of 65% (240 days), we believe this will provide a 7% bump to our FY25F CNP, bringing growth for the year to +16% - a significant premium to the KL ENERGY index's flat growth expectations. Nevertheless, we maintain our forecasts for now until the group successfully acquires a charter contract for the vessel. We think the purchase price is fair given its relatively young age as similar purchases globally in the past 2 years has been within the region of US$15- 25mil in our observation. For reference, the cut-off age for PSVs are similar to anchor handling tug & supply vessels (AHTS) at 20 years.
• Sufficient headroom for further expansion later. The acquisition price is expected to be satisfied by the Group's recent RM200mil sukuk issuance. Given the choice of vessel and price, we believe the acquisition is reflective of management's prudent capital allocation approach. With a remaining RM120.8mil, we believe Keyfield is in prime position for another vessel acquisition later this year. 1,450 1,500 1,550 1,600 1,650 1,700 0.0 0.5 1.0 1.5 2.0 2.5 3.0 KEYFIELD MK FBMKLCI Index OIL & GAS KEYFIELD INTERNATIONAL (KEYFIELD MK EQUITY, KEYF.KL) 7 Jan 2025 First vessel acquisition for FY25 Company Report BUY Muhammad Nuur Ashman Ab Razak muhammad-nuur- ashman.a@ambankgroup.com 0199965475 (Maintained) Rationale for report: Company Update

  Keyfield International 7 Jan 2025 AmInvestment Bank Bhd 2 Company profile Founded in 2013 by Dato' Darren Kee Chit Huei, Keyfield is a local O&G services company involved in the provision of offshore support vessels (OSV) and related ancillary services. The group's current fleet of 13 vessels consists of 9 accommodation workboats (AWB), 2 anchor handling tug & supply vessel (AHTS), 1 geotechnical vessel and 1 work barge. The group also charters third-party vessels on spot basis. Notable clients include Petronas Carigali (PCSB), Petra Energy, MDPC (a subsidiary of MISC), Perdana Petroleum and PTTEP. Keyfield was recently listed on the main market of Bursa Malaysia on 22 Apr 2024 through the initial public offering of 209mil new shares at an IPO price of RM0.90. Investment thesis and catalysts One of the prime proxies to the OSV upcycle. As a pureplay OSV company, we view Keyfield as a prime proxy with a larger and younger vessel fleet relative to other listed peers. Additionally, Keyfield's DP2 vessels also sees a 20%-30% premium over 4-point mooring systems. Beneficiary of charter rate upcycle. The subsector has recently seen charter rates improved significantly over the past few years which we believe will remain at such levels in the medium term as market supply remains tight. Only player to have fleet expansion advantage. Post-IPO, Keyfield is expected to remain in a net cash position. In addition to its younger fleet age, we think this will be supportive of the group's expansion programme relative to peers, who are expected to be more focused on fleet renewal. With a projected RM 145mil in free cash flow by FY26F, we think Keyfield is well-positioned for further growth. Valuation methodology We value Keyfield at a TP of RM3.25/share, pegged to FY26F P/E of 10x at par to local O&G maintenance average. We believe this is fair given its market position. Our TP also implies a neutral 3-star ESG rating based on our in-house methodology. Risk factors Key downside risks to our investment thesis include:

1. Slower-than-expected activity in offshore exploration, production, and development, ii. Higher operating costs, from increased material costs or labor shortages, iii. Geopolitical and economic uncertainties impacting oil prices, iv. A sharp drop in oil prices, potentially triggering an industry de-rating, and v. Continued sector de-rating by banks and investors due to ESG and climate change prerogatives

Source: AmInvest Research - 7 Jan 2025