LOW-KEY Freight Management Holdings Bhd (FMH), a logistics services provider, recently emerged out of its shell when it announced that it was entering the oil and gas (O&G) industry in a bigger way together with Scomi Energy Services Bhd to jointly acquire, own and operate marine vessels.
FMH has already gained some exposure in the O&G sector by providing warehousing services to oil giant Shell.
After the JV, FMH would be able to provide more services to its oil and gas-related clients and expand its clientele in the O&G sector, RHB Research told its clients in a recent report.
By entering into this JV agreement, we reckon Scomi Energy would be able to tap on the knowledge and experience from FMH in tug and barge services.
Meanwhile, FMH would be able to leverage on Scomi Energy to continue riding on the robust O&G sector.
“While we make no changes to our earnings forecast, we are raising our valuation from 9.5 times financial year 2014 forecast price-earnings to 11 times.
“We think the re-rating is warranted due to its expansion into the bustling oil and gas sector,” said RHB Research which has a “buy” call on the company with a fair value of RM1.71.
FMH shares finished yesterday flat at RM1.34, still off its 52-week high of RM1.50.
Its pre-tax profit rose to RM6.81mil for the third quarter ended March 31, 2013, up RM1.7mil from RM5.10mil in the same period last year.
Revenue was up by 20% to RM91.83mil from RM76.64mil.
Source from http://biz.thestar.com.my
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