TMCNet:  HLIB maintains `buy' call on Scomi Energy [New Straits Time (Malaysia)]

[February 11, 2014]

HLIB maintains `buy' call on Scomi Energy [New Straits Time (Malaysia)]

(New Straits Time (Malaysia) Via Acquire Media NewsEdge) HONG LEONG Investment Bank Research (HLIB) has maintained its "buy" call on Scomi Energy Services Bhd with an unchanged target price of RM1.02, pegged to 16 times calendar year 2015 earnings per share of 6.4 sen.

This came after Scomi Energy secured two contracts worth RM165 million recently.

Scomi Energy aims to double its drilling fluid and waste management's market share to 14 per cent per cent over next seven years through product cross-selling and entering new markets.

Besides growing its core business, the firm has a long-term strategy to expand its product range (such as well completion, sub- surface, wireline and operations, and maintenance) and aims to be an integrated oilfield services provider like Schlumberger and Halliburton.

"We expect the third-quarter results to be in line with our forecast, albeit some margin pressure due to a ramp up in initial cost for new projects," said HLIB Research.

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