STOCK FOCUS OF THE DAY

STOCK FOCUS OF THE DAY
Alam Maritim Resources : Underwater services to power earnings BUY

We maintain our BUY call on Alam Maritim Resources (Alam) with higher fair value of RM2.37/share pegging its FY10F earnings to a PE of 10x. While vessel chartering remains its bread and butter, underwater services would provide the next growth catalyst with a Swiber deal - to co-own a pipelay barge - completing the unit. We have increased our earnings estimates and we estimate an EPS of 20sen-27sen (+4%-11%) for FY09F-FY11F. Alam is trading at 9x, a 10% discount to the oil & gas sector PE average of 10x. We believe Alam deserves a multiple of at least 10x in line with the sector’s average as it is well positioned to ride the next upcycle with a strong record of accomplishment.

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