STOCK FOCUS OF THE DAY
Sapura Energy: SK408 FID drives up valuation of E&P listing BUY
Our BUY recommendation is maintained on Sapura Energy (Sapura) with unchanged forecasts and fair value of RM1.00/share, based on a 50% discount to FY19F book value. We remain positive on Sapura’s potential listing of its exploration and production (E&P) division as the group together with its partners Petronas Carigali and Sarawak Shell have reached the final investment decision (FID) to develop the Gorek, Larak and Bakong fields as phase 1 in the SK408 production sharing contract following the signing of the key terms to the gas sales agreement.
More EPCIC jobs are expected, possibly from a central processing platform for the KG-DWN-98/2 deep-water project off India's east coast. Hence, we believe that the 66% discount to book value currently is unjustified vs. 10% for Bumi Armada and 52% for MMHE.
RETAIL RESEARCH
Stocks On Radar: QL Resources, PUC, Vitrox Corporation, Aemulus Holdings
ECONOMIC HIGHLIGHTS
Malaysia: 1Q2018 GDP expected to stay healthy
China: Expect weaker prices
NEWS HIGHLIGHTS
UMW Holdings: Explores options
BHIC: To gain from Navy plan
Datasonic: Proposes issuance of one-for-two free warrants
Pharmaniaga: Bullish on Indonesian market
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The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.
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