News Last Friday, Alam Maritim Resources Bhd (“ALAM”)
announced that its wholly-owned subsidiary, Alam Maritim (L) Inc (“AMLI”) has completed
a joint venture (JV) transaction with Globe Marine Services Co (“GLOBE”).
GLOBE and AMLI hold 60% and 40% equity stake
respectively in the JV entity, known as Globe Alam Marine Services Co.
Comments The purpose of this JV is to venture and
explore into the oil and gas industry in Middle East, particularly in the
Kingdom of Saudi Arabia.
The JV company is incorporated to undertake
the projects that provides marine constructionrelated ion of maritime services,
which we believe it will benefit ALAM’s core businesses, namely Offshore
Vessels Services and Underwater Services.
Based on the JV company’s authorized share capital
of SR500,000.00, AMLI is required to invest c.RM168k, assuming exchange rate of
SR0.80 for RM1.00.
We believe ALAM should have no difficulty for this
initial investment funding given its relatively small capital outlay.
At this juncture, we do not impute the
earnings contribution for FY12E.
Outlook We are neutral on the JV as its still at the preliminary
stage.
Forecast Maintaining FY12E-14E earnings of
RM54.3mRM76.4m.
Rating
MAINTAIN OUTPERFORM
We believe the company will continue to see earnings
growth in FY12E as a result of the improving vessels utilisation rate and the
group are aggressively bidding for long-term contracts.
Valuation Maintain our TP of RM1.00 based on 12x PER on our
FY12E EPS estimate of 8.3 sen.
Risks Exposure to political and global economic condition risks for the JV in Middle East.
Source: Kenanga
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