Alam has secured a US$18m contract from Samsung to fabricate and install two mooring buoys for Petronas Carigali’s Sabah oil & gas terminal (SOGT). This contract could be a precursor to the award of a US$36m pipe installation contract, bringing the value of the total package to US$54m. We understand that Alam, which has the backing of a Yayasan Sabah unit, is wellplaced to clinch the pipe installation portion too. We maintain our forecasts, which already include the SOGT package that we assume will be worth US$50m. Our target price remains at RM1.40, valued at an unchanged 20% discount to our target market P/E of 14.5x. We continue to rate Alam a BUY, with the potential re-rating catalysts being 1) this SOGT announcement, 2) consensus upgrades, and 3) more pipe installation ventures.
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