KUALA LUMPUR: RHB Research is preserving Bumi Armada Bhd
as its top sector pick as its latest outcomes outperformed expectations.
The offshore vitality companies supplier lately mentioned 1Q22 core revenue surged 21% year-on-year on decrease depreciation and finance prices to RM178mil, which was 29% and 30% of RHB’s and consensus full-year estimates.
“Apart from bidding for brand new FPSO tasks, it is usually exploring new alternatives reminiscent of floating LNG (FLNG) and carbon seize tasks within the longer run.
“Bumi Armada remains our sector Top Pick for its undemanding valuation (3.8x FY23F P/E) and strengthening stability sheet, led by steady FPSO operations and steady asset monetisation,” mentioned RHB.
The dealer elevated its FY22-24 earnings estimates by 3% to 4% after decreasing finance and depreciation prices.
It maintained “purchase” however lowered its goal worth to 58 sen from 64 sen after rolling ahead its valuation base 12 months to FY23.
Meanwhile MIDF Research, which reiterated its “purchase” suggestion and goal worth of 72 sen, is optimistic over the efficiency of the group’s FPSO section and potential securement of latest contracts on the again of accelerating oil and gasoline costs within the near-term.
“The world FPSO market measurement is anticipated to rise from US$7b to US$17b by 2027, in tandem with the excessive oil costs attractive upstream and midstream actions, the rising variety of offshore reserves discovery, and the growing demand for hydrocarbons worldwide – all which might profit BAB’s operations within the subsequent coming quarters.
“We reiterate our optimistic stance on Bumi Armada, primarily based on its strong orderbook and stability sheet, in addition to its massive
community of operations,” it mentioned.
