SapuraCrest Petroleum update – Expect a barrel of positives in 2Q
We highlight two issues in this note: 1) 2Q results, which will be released this week, are expected to be commendable and in line with our forecast, with a net profit of at least RM35m (+35% qoq and +10% yoy). The main catalysts are higher drilling charter rates, improved associate contribution and a new Shell contract. 2) Winners of the five-package, RM3bn transport & installation contract may be announced in Oct instead of Nov. Supported by in-house pipelay barges, SapuraCrest is gunning for all five packages. Although we maintain our forecasts and target basis of 15x P/E, our target price rises from RM2.07 to RM2.56 as we roll it a year forward to end-CY10. SapuraCrest remains firmly an OUTPERFORM, with the potential re-rating catalysts being 1) new contract wins, 2) success in new markets, and 3) a growing fleet of strategic assets.
Ann Joo Resources visit – Ready for blast-off
Economic news – Aug 09: Reserves rose by US$2.1bn
Economic news – Jul 09: Export contraction has hit the bottom
News of the Day
– Palm oil prices drop to near 6-week low amid output concern
– Government may decide on nuclear option by early 2010
– Sarawak Energy and Tenaga exploring funding options for Bakun
– Naza duo, partners raise offer price for Kumpulan Jetson to RM1
– Malaysia plans to review renewable energy tariff rates
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