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CIMB Research has Outperform on Bumi Armada
by hlk Fri 02 Sep 2011, 13:00
KUALA LUMPUR: CIMB Equities Research has initiated coverage of Bumi Armada Bhd with an Outperform and a target price of RM4.55.
It said on Friday, Sept 2 it likes Bumi Armada as it is one of Southeast Asia’s largest floating production storage and offloading (FPSO) vessel providers and is well on its way to becoming the world’s No. 4 FPSO player by FY14.
Other pluses are good earnings visibility from BArmada’s long-term FPSO contracts and RM5.8 billion order book, excluding potential RM2.5 billion contract extensions.
It anticipated record net profits in FY11-FY13 which suggested a three-year EPS CAGR of 29.7%, driven by two new FPSO contracts per annum.
“We begin coverage with an OUTPERFORM recommendation and a target price of RM4.55, based on
17.4 times CY13 P/E, a 20% premium over our 14.5 times target market P/E to reflect the company’s above-industry execution and profitability record, international reach and big-cap status.
“Our target price implies share price upside of 28%. The potential rerating catalysts are 1) new FPSO contracts, and 2) marginal field ventures,” it said.
It said on Friday, Sept 2 it likes Bumi Armada as it is one of Southeast Asia’s largest floating production storage and offloading (FPSO) vessel providers and is well on its way to becoming the world’s No. 4 FPSO player by FY14.
Other pluses are good earnings visibility from BArmada’s long-term FPSO contracts and RM5.8 billion order book, excluding potential RM2.5 billion contract extensions.
It anticipated record net profits in FY11-FY13 which suggested a three-year EPS CAGR of 29.7%, driven by two new FPSO contracts per annum.
“We begin coverage with an OUTPERFORM recommendation and a target price of RM4.55, based on
17.4 times CY13 P/E, a 20% premium over our 14.5 times target market P/E to reflect the company’s above-industry execution and profitability record, international reach and big-cap status.
“Our target price implies share price upside of 28%. The potential rerating catalysts are 1) new FPSO contracts, and 2) marginal field ventures,” it said.
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