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Reports Malaysia

Malaysia stock market and companies daily report (December 12, 2013)

December 12, 2013, Thursday, 05:28 GMT | 00:28 EST | 09:58 IST | 12:28 SGT
Contributed by Shares Investment

Coastal Contracts Bags RM148m New Orders

- Coastal Contracts’ wholly-owned subsidiaries, Thaumas Marine and Coastal Marine, have collectively secured contracts for the sales of one unit of subsea support maintenance vessel and two units of low-end vessels, totalling RM148 million. All of these vessels are expected to be delivered in 2013 and 2014.

- This is the fifth batch of vessel sales order secured by the group in FY13, taking its order book to RM1.3 billion. The new vessel orders bring total sales for FY13 to approximately RM1.5 billion, a fresh record high for yearly vessel sales order for the firm.

- Coastal Contracts expects the current buoyant drilling and bidding activities to help the group capture the strong demand for offshore support vessels (OSV) and fast-track its earnings. For 9M13, the firm reported a 13.8 percent jump in net profit to RM102.7 million against RM90.2 million a year ago.

Significance: With significant crude oil discoveries in the deepwater regions, such as the golden triangle of West Africa, US Gulf of Mexico and Brazil, the company foresees that the deepwater-cable OSV market will have more growth opportunities. Thus, it has scaled up its shipbuilding value chain to focus on larger and deepwater-capable OSVs.

Alliance IB Research Maintains “Neutral” Call On PPT

- Perisai Petroleum Teknologi (PPT) announced that its floating, production, supply and offloading vessel (FPSO) – Perisai Kamelia, has been successfully deployed in the North Malay Basin early production system. The vessel is being contracted to Hess Exploration and Production Malaysia for a three-year period. The charter is valued at US$272.1 million or RM870 million.

- The news is positive for PPT as earlier in the year, there was concern that the FPSO contract might be deployed later than expected. This was due to the three months delay in completing the acquisition of a 51 percent stake in the FPSO, which was finally completed in August 2013.

- The new FPSO vessel will offset the loss of earnings from Enterprise 3 and the Rubicone mobile offshore production unit (MOPU) in 4Q13. Going into FY14, with a full-year earnings contribution from Perisai Kamelia, Alliance IB Research predicts earnings per share (EPS) growth of 35 percent year-on-year. This growth will also be driven by the PP101 jack-up rig which is slated for delivery in mid-2014.

Significance: Alliance IB Research maintains its “Neutral” call on PPT with a target price of RM1.36 based on FY14 EPS pegging to an industry mid-cycle price-to-earnings ratio of 11.7 times. Downside risk to FY14 estimates includes PPT not securing charters for the unused vessels by mid-FY14 and no timely contract secured for the PP101 jackup rig upon delivery.

Bloomberg TV Partners Encorp For Malaysia’s First Business News Channel

- Bloomberg Television (Bloomberg TV) has signed a landmark partnership with Encorp to create the first business news channel in Malaysia in 2014.

- “Malaysia’s business sector and capital markets had gone from strength-to-strength in recent years and have been fundamental in Malaysia’s economic transformation,” Head of Bloomberg TV for Asia-Pacific Parry Ravinddranathan said. This has driven global and local demand for comprehensive business news from Malaysia, providing an exciting opportunity for Bloomberg TV Malaysia to play a role in meeting that need, he added.

- The Malaysia partnership continues Bloomberg TV’s momentum in Asia, following the launch of Bloomberg TV Indonesia and Mongolia in the past year and the company’s on-going investment in news coverage and product development in Malaysia.

Significance: Malaysian viewers can expect in-depth coverage of local business stories as well as up-to-the minute reporting on global financial markets that affect the local economy in 2014. Bloomberg TV Malaysia would fill a gap in the marketplace for high quality, market-moving business news, which will be potentially seen by 340 million homes worldwide.