Maintain BUY. The three new contracts that Alam announced for its three workboats and an AHTS vessel yesterday are not large at a combined RM34m but boost Alam’s order book by 8% to RM484m and revives newsflow after a dry spell. To date, the company has landed RM140m worth of new contracts. We maintain our EPS forecasts which already factor in contract extensions and renewals as well as the Sabah oil & gas terminal’s (SOGT) pipeline installation contract, which we assume is worth US$50m. Also intact is our target price of RM1.40 as we continue to value Alam at a 20% discount to our target market P/E of 14.5x. We advise investors to BUY this major oil & gas laggard given the potential share price catalysts of 1) the SOGT contract, and 2) more pipe installation ventures.
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