Petra Perdana Looked Very Interesting

Sometimes when your fundamentals are not so rosy, you can still be attractive provided you are in the right sector. Petra Perdana (7108) is such a counter. The share desperately needs a strong and influential shareholder, and the pick up in volume and share price over the past week looked very persuasive.

The bad parts: Petra Perdana reported a RM70.3m core net loss for FY10 (vs RM13.7m core net profit in FY09) due to lower vessels utilisation, decrease in charter rates, higher mobilisation cost and increase in lease rental due to 7 new deliveries of vessels in 2010, impairment losses on receivables and impairment loss on property, plant and equipment. The company also reported a lower revenue (-57.9% yoy) because of the divestment of Petra Energy in December 2009. FY10 net loss of RM71.5m was steeper than market expectation of RM45.5m; core net loss of RM70.3m came in below our expectation of RM64.2m due to lower-than-expected contributions from Petra Energy arising from the cost overruns in its Kemang project.

In view of the anticipated increase in Malaysia and regional oil & gas exploration and production activities, the potential is strong that their vessel utilisation rates and charter rates are set to recover slowly in 2Q-3QFY11. 5 out of Petra’s 15 new vessels are currently bidding for contracts, while most of its 8 older vessels are currently on standby mode.

M&A opportunity and/or potential strategic tie-up with other oil & gas companies will lift investor interest in the stock and along with that a re-rating in its share price. Indications are very strong that there will be a new controlling shareholder soon. Its their strategic assets which will complement a much bigger boy in the industry.



Stock Data
Issued shares (m) 450.1
Mkt cap (RMm) 407.4
Avg daily vol - 6mth (m) 6.04
52-wk range (RM) 0.74 – 1.59
Est free float 77%
NTA per share (RM) 1.06
P/NTA (x) 0.85

Major Shareholders: (%)
Nam Cheong Dockyard 9.1
Lembaga Tabung Haji 9.2
Amanah Saham Wawasan 2020 5.6
Koh Poh Wat 5.0

Looking for RM1.35 ...

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