Investors may now regard Perdana Petroleum (Perdana) as a hidden jewel since the company is recovering operationally although its share price has been languishing near the bottom. We also see the company as a potential M&A target given that it owns strategic assets such as work barges, work boats and deepwater AHTS, as well as its attractive stock valuation (with a P/BV less than 1x). Finally, we expect more improvement in its 2Q and 3Q results due to the better weather conditions over the next few months, which will help to smoothen and facilitate O&G activities. Maintain Buy with an unchanged fair value of RM1.50.
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