We are attaching a 10% discount to our CY09 target PER of 12x to fairly value Perisai at RM1.04. The migration of the shares to Main Board in June will improve its appeal among institutional investors as it is grossly undervalued based on its CY09 PER of 5.8x vs. sector PER of 8.6x. It is the cheapest oil and gas stock under our coverage. Maintain Buy.
REVIEW
Perisai’s 1QFY09 net profit of RM16mn came within our forecast RM15mn to RM17mn. It could have been much higher at RM18mn if not for the RM3.33 losses incurred by its 60% subsidiary Corro-Shield.
The 1QFY09 net profit is higher than the RM15.2mn reported net profit for the whole of 2008. The spectacular performance was made possible by the strong full quarter contribution from Enterprise 3, its pipe laying vessel that started operation in November last year.
EBITDA margin improved dramatically to 69.2% from 17.6% a year ago, thanks to the pipe laying vessel, which is on a bareboat charter to TL Offshore at a day rate US$95k/day, and the SAT system that become operational in April 2009
The 1QFY09 net profit is higher than the RM15.2mn reported net profit for the whole of 2008. The spectacular performance was made possible by the strong full quarter contribution from Enterprise 3, its pipe laying vessel that started operation in November last year. EBITDA margin improved dramatically to 69.2% from 17.6% a year ago, thanks to the pipe laying vessel, which is on a bareboat charter to TL Offshore at a day rate US$95k/day, and the SAT system that become operational in April 2009
OUTLOOK
We believe something exciting is brewing behind the scene based on the company’s recent announcement to issue a US$10mn nominal value of zero coupon 2-year redeemable convertible bonds (RCB). It has a taker for the issue in TAEL One Partners Ltd of Singapore, which is willing to subscribe for it at a 12% discount to its nominal value. This translates into an annual interest rate of 6.6%.The conversion price has not been fixed and Perisai has the option to redeem up to US$5mn at 100% of the nominal value, which will minimize the issuance of new shares.
We believe something exciting is brewing behind the scene based on the company’s recent announcement to issue a US$10mn nominal value of zero coupon 2-year redeemable convertible bonds (RCB). It has a taker for the issue in TAEL One Partners Ltd of Singapore, which is willing to subscribe for it at a 12% discount to its nominal value. This translates into an annual interest rate of 6.6%.The conversion price has not been fixed and Perisai has the option to redeem up to US$5mn at 100% of the nominal value, which will minimize the issuance of new shares.
We suspect Perisai is raising the money to commercialize some of its promising technologies that it has been working with in the past few years such as the Alpha Prime Module and SIRPS. The SIRPS has undergone a few modifications and known as MOPSU currently. The license for it is held by Kingtime International Limited that gives Perisai first right of refusal to acquire a strategic investment in MOPSU and Perisai is evaluating its options currently. 
By acquiring the rights to MOPSU, Perisai has the option to engage its Alpha Primeas a topside module on this technologically advanced cost efficient mobile offshore drilling, production and storage unit that could potentially save US$100mn per field.
No comments:
Post a Comment