AmResearch keeps Buy on SapuraCrest, unch FV RM3.12

AmResearch reiterates BUY call on SAPURACREST PETROLEUM BHD [] (SapCrest) with unchanged fair value of RM3.12/share based on a CY10F PE of 22 times.

The research house said on Friday, June 25 SapCrest remains its top pick in the oil & gas sector.

The factors are its (i) Dominant position in the deepwater pipe-laying market; (2) Healthy balance sheet; (3) Sizeable oil & gas asset ownership; (4) Substantial Seadrill equity participation of 24% currently; and (5) Strong FY09-FY13F earnings CAGR of 23%.

AmResearch said SapCrest’s 1QFY11 net profit of RM57 million came in within expectations, accounting for 25% of both its FY11F forecast of RM202 million and 23% of street estimate of RM217million.

"We caution that the group’s 4Q earnings tend to be the weakest due to lower offshore CONSTRUCTION [] work during the monsoon season. Hence, we maintain FY11F-FY13F earnings. Group did not declare any quarterly dividend as expected," it said.



Written by AmResearch