SapuraCrest Petroleum – Drilling into a record 1H (CIMB)

SapuraCrest posted a 2QFY1/11 net profit of RM53m, taking the 1H bottomline to a record RM104m. At 49% of our full-year forecasts and 48% of consensus estimate, we consider the performance to be broadly in line with expectations. Also not surprising is an interim DPS of 3 sen, which matches last year’s payout. We maintain our earnings forecasts but raise our target price from RM3.02 to RM3.13 as we roll it over to end-CY12 and apply our revised target market P/E of 13.8x from 15x previously. SapuraCrest remains a BUY and our top oil & gas pick. Factors that could catalyse the stock are 1) active order book replenishment, 2) success in new markets, i.e. the Middle East, and 3) a growing fleet of strategic assets.