HLIB Research revises upward target price on Perdana Petroleum
KUALA LUMPUR, Jan 23 – Hong Leong Investment Bank Research (HLIB Research) has revised upward its target price on Perdana Petroleum Bhd to factor in an 18 per cent increase in daily charter rates (DCR) of US$25,000 (RM76,000) for the work boat and work barges.
HLIB Research said in a note today this is to reflect the latest contract win which was priced at 18 per cent higher than its estimates.
The new target price stands at RM1.70 per share against RM1.50 previously.
“We believe there is still upside to the work vessel DCR as the cyclical
upturn steaming from an increase in offshore oil and gas work which in turn flows from increased capital expenditure investment,” it said.
It noted an additional catalyst for utilisation is an estimated RM10 billion of offshore hook up and commissioning (HUC) and topside maintenance work.
This includes an estimated RM2.5 billion Pan-Malaysia brown field maintenance and HUC contract with Shell.
“We understand that Perdana Petroleum is co-bidding for these contracts with 19 per cent shareholder Dayang Enterprise Holdings Bhd.
“We believe that the HUC and maintenance contract bids involve the work barges Superior, Odyssey, Enterprise and two new builds expected to be delivered by the second half of this year,” it said.
HLIB Research noted with the possibility of most of the fleet locked into long-term contracts, growth from new vessel acquisition will become increasingly viable and likely.
Meanwhile, the research house estimated Perdana Petroleum’s profit after tax and minority interest for the financial year (FY) ending March 31, 2013 to rise to RM313 million from RM264 million estimated for FY 2012. – Bernama