KUALA LUMPUR (Nov 4): RHB Research Institute has lowered the target price (TP) for Alam Maritim Resources Bhd to RM1.12 from RM1.35 amid a “cautious” outlook for the oil & gas sector.
This was despite Alam's announcement yesterday it had secured a RM31.7 million contract to demobilize a floating storage facility and possibly secure a short-term contract for 1MAS-300 pipelay barge.
“We believe they are insufficient to lift the stock’s sentiment amid the current cautious outlook,” said RHB research analyst Kong Ho Meng in a note today.
Still, he raised FY14F earnings per share by 5% to account for the contract win and another possible short-term contract.
Kong maintained his “neutral” call for the stock.
He said the contract secured could be similar to the decommissioning job carried out for M3nergy’s Perintis floating, production, offloading and storage located offshore Terengganu.
Kong expects Alam Maritim to perform the engineering phase of the work with its 50% joint-venture, Alam Swiber Offshore SB.
Alam Maritim traded unchanged at RM1.07, with 471,600 shares done at 2.35 pm.