Coastal’s 1HFY11 results were within expectations, supported by a strong existing orderbook of over RM500m. Going forward, we continue to see Coastal as a potential merger and acquisition target due to its attractive valuation, and its ownership of a strategic asset in the form of a yard in Sandakan that is located in a strategic area where most deepwater activities would be centered in the future. Maintain Buy with a fair value of RM3.38, based on a PER of 7x FY12 EPS.
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