Bursa Malaysia Stock Price Target: 05/25/14

KUALA LUMPUR: AllianceDBS Research has maintained its 'buy' call on Bumi Armada Bhd due to the company's bright prospects and a strong RM32 billion orderbook.

The research house also raised the global floating production, storage and offloading (FPSO) player's target price to RM5.15 from RM4.50 previously.

"While we lower 2014 and 2015 financial years earnings estimates by 5.0 per cent and 9.0 per cent, respectively, to reflect slower offshore support vessel (OSV) and transport and installation (T&I) businesses, we still expect a strong pick-up in earnings in subsequent quarters.

"This will be driven by the Kraken FPSO, new contribution from the Angola FPSO and seasonal pick up T&I and OSV in Malaysia and in the Caspian Sea," the

research firm said in a note today.

Meanwhile, Bumi Armada proposed a bonus and rights issue last week, which would raise an estimated gross proceeds of RM2.25 billion.

Of the total, RM1.76 billion would be used for capital expenditure and the balance for working capital and expenses for the proposals, the company said.

"Of the RM1.76 billion capital expenditure, 80 per cent will be used to fund a new FPSO project and the remainder for new OSV and T&I assets.

"We view that the rights issue is attractive for investors. As such, we recommend investors to subscribe their rights entitlement.

"Based on our indicative ex-all target price of RM2.65, upside is still significant at 15 per cent," the research house added.-- Bernama

AllianceDBS maintains 'buy' on Dayang

Stock Name: DAYANG
Company Name: DAYANG ENTERPRISE HOLDINGS BHD

Research House: ALLIANCE

Price Call: BUY

Target Price: 4.55

KUALA LUMPUR: AllianceDBS Research maintained its 'buy' call on Dayang Enterprise Holdings Bhd with a target price of RM4.55 per share, due to the group's clear earnings visibility, clean balance sheet with net cash position and strong execution track record.

In a note today, AllianceDBS Research expected the pace of work for the Pan Malaysian hook-up and commissioning contracts (HCM) awarded to Dayang Enterprise last May would pick up in the coming quarters.

The research firm said it was confident that Dayang Enterprise would be able to keep up with the work orders.

"As the biggest winner of the RM10 billion Pan Malaysian HCM contracts, earnings visibility for Dayang is good with an estimated RM4 billion orderbook," said AllianceDBS.

Dayang Enterprise has deployed five vessels out of six it chartered from associate company, Perdana Petroleum Bhd, to support its enlarged HCM activities.

"With access to Perdana's fleet, we view that the group will be able to take on more contracts on top of its existing orderbook in the future," said AllianceDBS.

As at 12.04pm, Dayang Enterprise's share price shed six sen to RM3.50, with 333,000 shares changing hands.-- Bernama