Stock Name: KENCANA
Company Name: KENCANA PETROLEUM BHD
Research House: MIDF
KUALA LUMPUR: MIDF Research has maintained its trading buy call on Kencana Petroleum at RM1.56 with an unchanged target price of RM1.86 after the company in collaboration with Yinson Marine Services Sdn Bhd (a part of YINSON HOLDINGS BHD []) were awarded a service contract for the provision of an offshore support vessel by Petronas Carigali Vietnam Limited.
The charter contract tenure is awarded for one year with an option to extend another.
The guided contract fee of RM33 million spread out over two years indicate charter rates between US$1.50 to US$2.60 per brake horse power (bhp), said the research house.
"We estimate the anchor handling tug supply (AHTS) to commence operation in 2Q10. Our preliminary estimation suggests the collaboration will encompass Kencana supplying its technical expertise while Yinson Marine providing the vessel.
"We believe the charter could encompass either AHTS or workbarges. No immediate impact to FY10 earnings," it said.
MIDF Research nevertheless expects marginal upside revision to its forecasts with FY11/12 earnings increasing by 0.48% and 0.64% assuming Kencana supplies the AHTS.
"We have yet to impute earnings contribution from this contract into our forecasts.
"Maintain trading buy with an unchanged TP of RM1.86 based on rolled-over EPS to FY11 of 15 times, a premium against our employed sector average EPS11 of 14 times," it said.
Company Name: KENCANA PETROLEUM BHD
Research House: MIDF
KUALA LUMPUR: MIDF Research has maintained its trading buy call on Kencana Petroleum at RM1.56 with an unchanged target price of RM1.86 after the company in collaboration with Yinson Marine Services Sdn Bhd (a part of YINSON HOLDINGS BHD []) were awarded a service contract for the provision of an offshore support vessel by Petronas Carigali Vietnam Limited.
The charter contract tenure is awarded for one year with an option to extend another.
The guided contract fee of RM33 million spread out over two years indicate charter rates between US$1.50 to US$2.60 per brake horse power (bhp), said the research house.
"We estimate the anchor handling tug supply (AHTS) to commence operation in 2Q10. Our preliminary estimation suggests the collaboration will encompass Kencana supplying its technical expertise while Yinson Marine providing the vessel.
"We believe the charter could encompass either AHTS or workbarges. No immediate impact to FY10 earnings," it said.
MIDF Research nevertheless expects marginal upside revision to its forecasts with FY11/12 earnings increasing by 0.48% and 0.64% assuming Kencana supplies the AHTS.
"We have yet to impute earnings contribution from this contract into our forecasts.
"Maintain trading buy with an unchanged TP of RM1.86 based on rolled-over EPS to FY11 of 15 times, a premium against our employed sector average EPS11 of 14 times," it said.
No comments:
Post a Comment