KUALA LUMPUR: Affin Hwang Research has maintained its Buy call on Alam Maritim
with a targe price of 70 sen based on 10x 2015E PE.
"Alam’s share price looks oversold. At nine times 2015E PER, 0.7 times P/BV and a mere net gearing of 0.1 times, the risk-return trade-off is favourable.
"Key re-rating catalysts for the stock include a sustained rebound in the oil price, stronger-than-expected results and sizeable new contract wins," it said.
The research house said it is cautious on the OSV segment in view of softening dayrates and lower demand.
"That said, we believe that higher subsea earnings (after acquisition of DSV) may help to mitigate the earnings shortfall from OSV," it said.
It said Alam Maritim is cautious given uncertainties with Petronas’ capex and work plans.
"Management’s view is that the oil & gas services providers may need to wait until late 1Q15 to have better clarity, when the monsoon season is over and the PSCs (having finalised their budgets) start to ramp up their activities," it noted.
Limited time offer:
Just RM5 per month.
