Affin Research maintains Buy on SapuraKencana, TP RM2.65

KUALA LUMPUR: Affin Investment Research is maintaining its earnings forecast and re-iterate its Buy rating on SapuraKencana Petroleum with an unchanged TP of RM2.65, based on 18 times CY13 price-to-earnings ratio (PER).

“SapuraKencana is our top pick in the O&G sector. We continue to like SKP for its integrated business model, extensive O&G asset base, strong management track record and a growing global footprint. Importantly, we believe Malaysia's O&G industry is still in a capex upcycle and SakuraKenanca is the best proxy to ride the capex cycle,” it said on Tuesday.

SapuraKencana announced on Monday its joint venture SapuraAcergy Sdn Bhd secured a US$45mil (about RM140mil) contract to provide a vessel in the Gulf of Mexico.

“We are generally positive on the contract win - the new contract win will help to improve Sapura 3000's utilisation rate, keeping the vessel occupied before the commencement of offshore installation works for the Australian Gorgon project and Shell's Gumusut-Kakap in 2013.

“The charter rate of US$360,000 a day is, in our view, fair. With the charter contract win, SKP has secured over RM1.5bil of new contracts for ytd-FY13 and on track to achieve our FY13 contract wins assumption of RM3bil,” said Affin Research.