Asset acquisitions, contract renewals and funding were among the issues raised by clients during our recent roadshow with Perisai’s MD. There is definitely upside to our forecasts if the company expands its fleet further via an acquisition. Watch this space for M&A news. Even without the new asset, FY12 is already shaping up to be a new record year for Perisai, thanks to maiden full-year contributions from Garuda and Intan. Our target price rises from RM1.45 to RM1.50 as we now use our revised CY13 target market P/E of 13x (12.6x previously). Perisai remains a Buy.
What We Think
We sense that most fund managers share our positive view of Perisai’s potential acquisition. The company’s existing 10 assets are all fully utilised, leaving it with no capacity to take on new jobs. A substantial earnings enhancement is definitely in the pipeline should the M&A be similar to the Garuda acquisition, which comes with a ready asset and a ready contract. We have not imputed the potential new asset in our forecasts.
Izzet (MD) did not specify the asset but indicated that it will be a specialised one. A fundraising exercise may be in the cards to facilitate the asset purchase, which may cost US$100m-200m.
What You Should Do
Investors should accumulate the stock aggressively. Our forecasts of record profits in FY12-14 support our sector-beating 3-year EPS CAGR of 99%. Yet, the stock offers the most share price upside in our oil & gas portfolio and the cheapest FY12-14x P/Es of 7-9 x.
What We Think
We sense that most fund managers share our positive view of Perisai’s potential acquisition. The company’s existing 10 assets are all fully utilised, leaving it with no capacity to take on new jobs. A substantial earnings enhancement is definitely in the pipeline should the M&A be similar to the Garuda acquisition, which comes with a ready asset and a ready contract. We have not imputed the potential new asset in our forecasts.
Izzet (MD) did not specify the asset but indicated that it will be a specialised one. A fundraising exercise may be in the cards to facilitate the asset purchase, which may cost US$100m-200m.
What You Should Do
Investors should accumulate the stock aggressively. Our forecasts of record profits in FY12-14 support our sector-beating 3-year EPS CAGR of 99%. Yet, the stock offers the most share price upside in our oil & gas portfolio and the cheapest FY12-14x P/Es of 7-9 x.
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