Hong Leong IB Research has upgraded Scomi Energy Bhd to a buy (from Hold) with a higher target price of RM1.12 (from RM1.02)after The Edge Weekly reported that Scomi Energy and its Australian partner Octanex would soon be awarded their first risk service contract (RSC) for the Ophir oilfield.
In a note Monday, the research said with assumptions of: i) 5 million barrel of recoverable oil; and ii) 30% stake, it estimates the RSC contract to contribute RM40 million-RM50 million (about 49-62% of FY14 PAT) to Scomi Energy’s bottomline.
“To note, if Scomi Energy wins the RSC for Ophir field, our target price will be raised from RM1.12 to RM1.28 (about 28.6% potential upside from current price and we only factored in half year contribution in CY15 given the first oil is only expected in 2H15).
“We raise our FY16/03 earnings by 13% after factored in improve margin on the oilfield services due to prudent cost management and higher mix of better margin product (grapheme drilling fluids). To note, we have not include any earnings from RSC contract yet.
“We upgrade from Hold to Buy with target price raised from RM1.02 to RM1.12 (based on unchanged 16x CY15 EPS of 7sen/share, post earning upgraded).
In a note Monday, the research said with assumptions of: i) 5 million barrel of recoverable oil; and ii) 30% stake, it estimates the RSC contract to contribute RM40 million-RM50 million (about 49-62% of FY14 PAT) to Scomi Energy’s bottomline.
“To note, if Scomi Energy wins the RSC for Ophir field, our target price will be raised from RM1.12 to RM1.28 (about 28.6% potential upside from current price and we only factored in half year contribution in CY15 given the first oil is only expected in 2H15).
“We raise our FY16/03 earnings by 13% after factored in improve margin on the oilfield services due to prudent cost management and higher mix of better margin product (grapheme drilling fluids). To note, we have not include any earnings from RSC contract yet.
“We upgrade from Hold to Buy with target price raised from RM1.02 to RM1.12 (based on unchanged 16x CY15 EPS of 7sen/share, post earning upgraded).
No comments:
Post a Comment