Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (April 23): Shares in Velesto Energy Bhd rose 3.28% in active trade this morning after it bagged four contracts from Petronas Carigali Sdn Bhd with an estimated combined value of US$104.68 million (about RM433.07 million).

At 9.10am, Velesto rose 1 sen to 31.5 sen with 13.56 million shares traded.

The group’s wholly-owned subsidiary Velesto Malaysia Ventures Sdn Bhd received four Letters of Award for the provision of jack-up drilling rig services for its jack-up rigs.

Meanwhile, Hong Leong IB Research maintained its “Hold” rating on Velesto at 31 sen with a higher target price (TP) of 31 sen (from 25 sen) after Velesto secured four drilling contracts worth US$105 million for Naga 2, Naga 3, Naga 5 & Naga 6.

In a note today, the research house said that overall, it was positive on the contract win as it improves the rig utilisation in 2H19 and is on track to management’s target of more than 80% for FY19 (vs FY18’s 73%).

“The average daily charter rate (DCR) of US$71,700/day is also 4% higher than average DCR of US$69,000/day achieved in FY18 as well as our FY19 DCR assumption of US$70,000/day.

“Therefore, we increased our FY19-20 earnings forecast by 90%-15% (amid a low base) respectively after imputing higher DCRs and utilisations.

“All in, maintain Hold recommendation on the stock with higher TP of 31 sen (from 25 sen) pegged to 0.9x FY19 PBV,” it said.

      Print
      Text Size
      Share