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Affin keeps ‘buy’ on Alam Maritim after vessel contract win

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Affin keeps ‘buy’ on Alam Maritim after vessel contract win Empty Affin keeps ‘buy’ on Alam Maritim after vessel contract win

Post by Cals Tue 29 Oct 2013, 12:33

Affin keeps ‘buy’ on Alam Maritim after vessel contract win
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com   
Tuesday, 29 October 2013 11:28
KUALA LUMPUR (Oct 29): Affin Investment Bank Research has maintained its ‘buy’ call on Alam Maritim Resources Bhd at RM1.56 with target price (TP) of RM1.80 after it bagged a RM37.9 million vessel chartering contract.

In a note today, the research house said it is positive on the contract win as the long contract tenure will ensure high vessel utilisation rate and improve earnings visibility over the next three years.

Affin IB research analyst Isaac Chow said the average daily charter rate of US$8,300 (RM26,078) is broadly in line with his forecast.

“That said, we make no change to our FY13-15 earnings estimates as we have already imputed a higher utilisation rate (over 90%) for Alam Maritim’s workboat and work barges and over 75% for its anchor handling tug supply vessels,” said Chow.

“We maintain our ‘buy’ rating with unchanged TP of RM1.80 based on 14 times CY14 earnings per share (EPS).”

He said the Alam Maritim stock would be closely watched among the oil and gas small & mid caps for its undemanding valuation at 12.1 times CY14 EPS.

Also, he added that the stock is a top pick due to the oil & gas support services provider’s strong earnings growth (recovery), driven by higher activities across all its business divisions and potential value accretive corporate exercises.
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