Affin IB Research maintains Buy on Alam Maritim, ups target price to RM1.80

Affin IB Research maintains Buy on Alam Maritim, ups target price to RM1.80
Business & Markets 2013
Written by theedgemalaysia.com
Thursday, 25 July 2013 08:31

KUALA BESUT (July 25): Affin IB Research has maintained Buy on Alam Maritim Resources Bhd at RM1.54 with a higher target price of RM1.80 and said Alam's OSV business was doing well.

In a note Thursday, the research house said the charter rates are firm and fleet utilisation rate is good (77% for AHTS and supply vessels, over 95% for accommodation vessels).

Moving forward, Alam will focus to grow its 3rd party vessel chartering business, in particular, the PSV segment, it said.

The research house said that separately, Alam's subsea business had recovered strongly backed by its RM221 million year-to-date subsea contract wins.

“We are positive on the subsea segment as several O&G majors (Shell, ExxonMobil, Murphy Oil and Hess) are expected to award more subsea contracts in 2H13/2014. We are raising our FY13-15 net earnings forecast by 7-21%, imputing stronger earnings growth from the OSV and subsea divisions, driven by higher third-party vessels chartering and higher subsea contract wins.

“In tandem, we are raising our target price to RM1.80 (from RM1.52) based on an unchanged 14x CY14 PER. Maintain Buy,” it said.