KUALA LUMPUR (Mar 22): CIMB Research has maintained its “Add” rating on Sapura Energy Bhd (SAPE) at 52 sen with a lower target price of 80 sen (from RM1.42) after SAPE announced today that it had won the EPCIC contract for the Pegaga gas CPP, which will be installed on Mubadala’s SK320 block; the value was not disclosed.

In a note March 21, the research house said it estimates the total contract value to be US$1.2 billion, with execution over 3.5 years to 3QCY21.

It said this is SAPE’s most significant fabrication job in some time.

“After hitting a recent low of 40 sen, SAPE’s stock is oversold as additional contract wins, the development of SK408, and the listing of its E&P arm could rerate the stock.

“We maintain Add but lower our SOP-based target price to 80 sen as we raise our discount on goodwill in light of the weak drilling charter rates,” it said.