Results Note � SapuraKencana (HOLD, maintain)

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Results Note � SapuraKencana (HOLD, maintain) - Expect profits to deteriorate towards year-end SAKP booked a core net profit of RM147.6m in 1QFY17. This seems decent at 22%/28% of our/consensus full year estimates, but we deem this below expectations as we expect a weaker 2H. Management has invalidated prevailing assumptions surrounding the group, guiding for RM7.0-7.5bn revenue and sub-30% EBITDA margin for FY17E. This led us to cut our FY17/18/19E forecasts by 78%/96%/72%. We expect SAKP to book a loss in 4QFY17, as utilisation of its services businesses continue to trend lower towards year-end. Maintain HOLD with a lower 12-month TP of RM1.36, based on SOTP valuation.

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