Company Update � Bumi Armada (BUY,
upgrade)
- Armada can weather the storm
The recent sell-off in Bumi Armada shares (-43%
YTD) looks overdone. The group�s fundamentals seem largely intact, as over 80% of its
2015E earnings should be backed by its long-term FPSO and T&I business.
FPSO should be supported by RM18.5bn in contracts, while T&I should be
anchored by recurring work orders from Petronas and LukOil. Upgrade to BUY
(from ADD) on YTD price weakness but lower TP to RM1.75 (from RM2.22) on SOTP
valuation adjustments.
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