SKPETRO – Fundamental Analysis (17 Sep 2015)

SKPETRO Analysis:-

Excel – http://1drv.ms/1KodLw1

My View:-

  • Valuation:
    • Absolute EY%:
      • Trailing:
        • FY15 (EPS: 0.193) – 4.473 (Uncertainty Risk: LOW)
        • R4Q (EPS: 0.231) – 5.365 (Uncertainty Risk: LOW)
      • Forward:
        • FY16 (EPS: 0.174 ± 5%) – From 3.835 to 4.238 (Uncertainty Risk: LOW)
        • FY17 (EPS: 0.168 ± 5%) – From 3.703 to 4.092 (Uncertainty Risk: LOW)
      • EPS applied to reach the current stock price (2): 0.086
    • Simple Yield Valuation:
      • FY15-EY%: 12%
      • FY15-DY%: 0%
      • R4Q-EY%: 11.6%
  • 17 Sep 2015 – SapuraKencana’s orderbook stands at MYR23bn. 54% of this is made up of work in the Americas, 27% in Malaysia and the rest come from Asia-Pacific, Australia and Africa works.
  • 17 Jun 2015 – “The group’s order book of RM5 billion to be recognised for next year represents only 50% of our yearly capacity, so we still need to go out and win another half of it. If we want to maintain at least the same kind of performance, we need to acquire at least RM6 billion worth of works [for] this year and the next in order to maintain the same turnover”
  • 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.
  • 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
  • 16 Jun 2015 – SKPETRO may be seeing its fabrication yard utilisation rate drop up to 30% next year
  • During FY16 Q2, provision for impairment on oil and gas properties of RM539.9 million is recorded
  • The significant provision had offset revenue rise as the group registered higher contributions from new international projects from the engineering and construction (E&C) division
  • I will hold and continue to accumulate SKPETRO.
  • Latest Financial – Q2 2016 Financial Report (17 Sep 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4867445

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

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    One thought on “SKPETRO – Fundamental Analysis (17 Sep 2015)

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