Maintain BUY with a MYR2.68 target price. While the earnings
impact of the AUD51m EPCIC job from Origin Energy will be
immaterial, the win reflects SapuraKencana’s aspiration to expand its
regional footprint and capitalise on opportunities, both locally and
abroad. We see SapuraKencana as a steady growth stock, asset rich and
balance sheet light (low net gearing), which will aid its quest to add
new assets in a highly capital intensive O&G environment. Our target
price pegs SapuraKencana at 20x FY1/14 EPS. Valuations are
inexpensive, considering the strong earnings growth outlook over the
next three years and its balance sheet strength.
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Source: Maybank Research - 23 May 2012
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