CIMB Research keeps SapuraKencana Petroleum as Outperform, TP RM4.80

The Star Online: 26 August 2013

KUALA LUMPUR: CIMB Equities Research continues to value SapuraKencana Petroleum at 21.8 times CY14 price-to-earnings (P/E), a 40% premium over its market target of 15.6 times, but still within the historical P/E range for oil & gas big caps.

"A strong order book remains a potential rerating catalyst for our Outperform call. SapuraKencana remains our top pick among oil & gas big caps," it said, keeping its target price at RM4.80.

CIMB Research SapuraKencana's current market cap of RM21bil far exceeds the RM10bil combined market cap of SapuraCrest and Kencana before the merger. The orderbook has also almost doubled from RM14bil pre-merger to RM27bil currently.

"Focus on the big picture and accumulate the shares as SapuraKencana offers attractive growth prospects with a three-year EPS CAGR of 34% vs. industry average of 17.7%," it said.