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Reports Malaysia

Malaysia stock market and companies daily report (December 17, 2013)

December 17, 2013, Tuesday, 06:27 GMT | 01:27 EST | 10:57 IST | 13:27 SGT
Contributed by Shares Investment

Puncak Niaga Secures RM2b Contract

- Puncak Niaga’s wholly-owned subsidiary GOM Resources has secured a contract for the Pan Malaysia field from Petronas’ 11 production sharing contractors. The contract duration is for a period of three years, with an option to extend for one more year.

- The aggregate contract sum was not announced by Puncak Niaga, however, MIDF Research estimates that it is worth between RM2 billion and RM3 billion, as the entire campaign could be in excess of RM15 billion.

- MIDF Research is maintaining its earnings forecasts at this point in time as they have factored in future contract wins.

Significance: MIDF Research maintains its “Buy” recommendation with an unchanged target price of RM4.04 per share. This represents an implied 2014 price-to-earnings ratio of 8.3 times. In addition, it has attached price-to-earnings ratio (PER) of 14 times for 2014 to the oil and gas segment, which is its average medium-cap oil and gas service providers’ target PER on Bursa Malaysia.

SapuraKencana Wins More Jobs

- Petronas announced that it has awarded the Pan Malaysia transport and installation contracts in four packages worth nearly RM10 billion, and SapuraKencana is one of the beneficiary. The contracts for the project will provide the necessary services to 11 production sharing contractors such as Shell, ExxonMobil and Petronas Carigali.

- HwangDBS Vickers Research suspects that given SapuraKencana’s size and capability, it could have been awarded two of the four packages. It estimates its order book to be worth RM25 billion after the latest contract win, which will underpin strong visibility over the next few years.

- The research house did not change its earnings forecast as they had earlier expected SapuraKencana to be the biggest winner of the transport and installation contracts given its unrivalled dominance in Malaysia.

Significance: HwangDBS Vickers Research continues to like SapuraKencana because of its unrivalled range of integrated offshore services, putting it among the front-runners to secure mega projects in Malaysia as well as overseas. Its three-year earnings compound annual growth rate of 49 percent is also the strongest within its Malaysian oil and gas universe.

Inari Amertron To Move To Main Market Block

- Indirect supplier of parts for Apple Corporation’s popular iPhone and iPad products, Inari Amertron expects to make the leap to the Main Market of Bursa Malaysia by as early as the first quarter of next year, according to its company’s vice-chairman, Dr Tan Seng Chuan.

- Anticipation of the company’s move from the Ace Market has boosted investor appetite and driven its share price up by more than 320 percent this year.

- For its 2013 financial year, Inari Amertron’s net profit expanded by more than 100 percent to RM41.2 million and RM19.3 million last year and has prepared a war chest of RM40 million to expand its capacity.

Significance: Inari Amertron has a forward PER of about 9.5 times, as opposed to the Main Market’s PER of just above 17 times. Analysts say there could be more upside for the stock as the transfer date of its listing status draws closer.