HLG: 30 May 2008 Petra Perdana - Quiet Q108; Maintain BUY
Petra Perdana BUY
Price target RM5.50
Share price at 29 May RM4.32
Investment summary
Q108 results were 40% below HLG/consensus, but we maintain our EPS forecast as Q1 is typically a slow business period. We continue to like Petra, given: (1) its fleet of high bhp essels offers greater leverage to deepwater oil & gas production; (2) delivery of 18 new vessels from now till 2010 potentially adds RM40m in incremental earnings.
We remain positive on O&G vessel owner/operators sector: (1) we believe charter rates are unlikely to see near term reversal and will continue to remain strong with new-builds lagging behind replacement market (2) the number of Malaysian flagged vessels is way below Petronas domestic demand.
Watch out for new jobs
Share price of vessel owners/operators have suffered due to absence of news flow in the last six months. We think the roll-out of vessel tender award in H208 for new E&P program will boost interest in Petra.
Custom Search
Saturday, 21 June 2008
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment