SKPETRO – Fundamental Analysis (29 May 2015)

*** In Annual Report 2015, SKPETRO made some minor changes to Cash Flow Statement. I have updated the figures.

SKPETRO Analysis:-

Excel – http://1drv.ms/1G5xLYH

Notes – http://tinyurl.com/nagx3x2

My View:-

  • Valuation:
    • Absolute EY%:
      • Trailing:
        • FY15 (EPS: 0.193) – Fair value 4.25 (Fair Value Uncertainty: LOW)
        • R4Q (EPS: 0.239) – Fair value 5.27 (Fair Value Uncertainty: LOW)
      • Forward:
        • FY16 (EPS: 0.192) – Fair value 4.24 (Fair Value Uncertainty: LOW)
        • FY17 (EPS: 0.21) – Fair value 4.63 (Fair Value Uncertainty: LOW)
      • EPS applied to reach the current stock price (2.61): 0.119
    • As for DCF, as SKPETRO does not disclose details of Operating Cash Flow, I will calculate DCF after SKPETRO releases Annual Report 2015.
  • 25 Mar 2015 – Orderbook remains healthy at approximately RM25.7b, stretching up to year 2024, with approximately RM19b in extension options.
    • 25 Mar 2015 – At the end of FY15 (2.6x of FY15 revenue) with 28% (RM7.3 billion) and 21% (RM5.5 billion) would be burned-out in FY16 and FY17 respectively.
  • Valuation of SKPETRO is very attractive as the company’s locked-in order book remains solid and that its oil fields are still in the black.
  • In FY15, SKPETRO FY15 normalised earnings rose by 6% yoy to RM1,154m
  • The DES and Fab & HUC segments registered topline growth with the exception of OCSS segment. DES segment remains as the key contributor with almost equal PBT contribution from Energy and Drilling.
  • The company has locked-in approximately >RM7b worth of jobs to be executed for FY16. Including revenue contribution from the Energy segment (approximately RM2b per year) and excluding joint-venture project portions, SKPETRO will still need to replenish and execute >RM2b worth of jobs in FY16 to at least match the normalised earnings achieved in FY15.
  • The weak global crude oil price and coupled with Petronas’ capex cut are still the key risks in FY16.
  • 11 May 2015 – SapuraKencana bags six contracts worth up to US$269m overseas in four different countries
  • I will hold and continue to accumulate SKPETRO.

Latest Financial – Annual Report 2015 (25 May 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4748429

At the time of writing, I owned shares of SKPETRO.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s