News Yesterday, PERISAI announced that it had
exercised the option from PPL Shipyard Pte Ltd to construct an additional rig
of similar specification to its first jack-up rig, Perisai Pacific 101 at a
price of USD210m (c. RM648.9m).
The contract price is payable in two portions
with the initial 20% payable upfront and the balance 80% upon delivery
(expected to be by 2Q15).
Comments We are
not surprised by the announcement as the recent private placement (that raised
RM84.3m) was initiated to raise funds for the purchase of the second rig. As
such, we expect a neutral response to this announcement by the market.
Our focus will remain on the impending asset
swap (50% of SJR Marine for 51% of FPSO Lewek Arunothai) that is targeted for
completion by mid-2013-3QFY13.
Outlook The
asset swap expected in mid-2013 above will expand Perisai’s service offering to
the production leg of the oil and gas value chain and boast its long term earnings.
The first jack-up rig (expected by July-2014)
will be the first kicker to earnings, with further growth by mid-2015 for
Perisai’s due to the incoming second rig.
The company’s strategy is to focus on its
drilling and production segments.
Forecast No
change to our earnings estimates given that the earnings accretion from the new
rig will only be in 2015.
Rating Maintain
OUTPERFORM
Valuation Our
unchanged target price of RM1.39 is based on a 13x PER target on CY13 EPS.
Risks 1) A
downturn in the oil and gas sector that will delay contract flows; 2) failure
to replenish contracts, which will significantly affect its earnings growth;
and 3) failure to achieve the expected margins on its projects.
Source: Kenanga
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