Stock Name: ALAM
Company Name: ALAM MARITIM RESOURCES BHD
Research House: OSK
Company Name: ALAM MARITIM RESOURCES BHD
Research House: OSK
Alam Maritim Resources Bhd's fourth quarter 2010 results, expected to be announced this week, are likely to be within or below expectations but OSK Research has maintained a "buy" recommendation on the stock with a RM1.50 target price.
The research house said there had been no change in the company's operating enviroment in the fourth quarter 2010 but there might be a provision for doubtful debts arising from Vastalux amounting to RM30 million.
If the management made a provision for the sum owing to it, the company's fourth quarter 2010 results were likely to fall into the red, it said in a equity research report today.
"Although investors may be uncomfortable with the negative news flow on Vastalux, we believe that this unfortunate event would probably have been built into its current share price, and that investors should turn to the company's longer term outlook instead," it said.
For the 2011 financial year, it said, the company had the right asset mix which would put it in a good position to ride on the current oil and gas (O&G) focus on existing and marginal oil field developments.
"Given that Petronas has been aggressively awarding new O&G contracts, especially those relating to existing and marginal oil field developments, we believe Alam Maritim stands a good chance of securing some of these jobs since its fleet utilisation is at about 70 percent which indicates that there is still room to grow its earnings," OSK Research said.
-- BERNAMA
The research house said there had been no change in the company's operating enviroment in the fourth quarter 2010 but there might be a provision for doubtful debts arising from Vastalux amounting to RM30 million.
If the management made a provision for the sum owing to it, the company's fourth quarter 2010 results were likely to fall into the red, it said in a equity research report today.
"Although investors may be uncomfortable with the negative news flow on Vastalux, we believe that this unfortunate event would probably have been built into its current share price, and that investors should turn to the company's longer term outlook instead," it said.
For the 2011 financial year, it said, the company had the right asset mix which would put it in a good position to ride on the current oil and gas (O&G) focus on existing and marginal oil field developments.
"Given that Petronas has been aggressively awarding new O&G contracts, especially those relating to existing and marginal oil field developments, we believe Alam Maritim stands a good chance of securing some of these jobs since its fleet utilisation is at about 70 percent which indicates that there is still room to grow its earnings," OSK Research said.
-- BERNAMA
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