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SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
17 October 2011
PP16832/01/2012 (029059)
Sector Update 21 June 2012
PP16832/01/2013 (031128)
Page 1 of 2
Malaysia
Oil & Gas FPSO Market – Lively and Vibrant
Pulsating with opportunities. We foresee a strong push for new and
rewarding FPSO contracts over the next five years, at a rate of 15-20
new orders p.a.. We see a greater preference for small- to mid-sized
leased converted FPSOs, with demand from the Asia-Pacific and Latin
American regions. Bumi Armada, Perisai, Yinson and SapuraKencana
are our picks to play the burgeoning demand for FPSOs.
Positive outlook on the FPSO space. FPSO utilisation is high, and
idle units are scant. Orders are on the rise as the number of projects
requiring FPSO solutions pick up. These positive indicators reflect
stronger global E&P spending as the search for hydrocarbon resources
continues, sustained by robust oil prices and energy security needs.
Good push for new and rewarding contracts. Out of 200-250
projects earmarked for FPSO solutions over the next five years
(average: 40-50 units p.a.), 100-140 firm projects will likely come
onstream (average: 20-28 units p.a.). We project 15 new FPSO orders
annually over 2012-14. Demand will likely come from Asia Pacific and
Latin America. Small - to mid-sized leased FPSOs (below 150,000bpd
capacity) which were converted will be the preferred asset class as
development moves into: (i) shallow water, (ii) marginal and (iii)
matured fields requiring rejuvenation works and (iv) fast-track projects.
Strategic partnerships, track record and balance sheet to fuel
growth. Leased operators with: (i) proven execution capabilities and
engineering skill sets, (ii) balance sheet strength and (iii) boosted by the
backing of a strategic partnership at the shipyard or oilfield operator
level, will benefit most from the growing demand for new FPSOs. The
returns from these FPSO charters are commendable, with project IRRs
averaging 10-12%, anchored by long term contracts.
FPSO stock picks. We see numerous opportunities for Bumi Armada
to capitalise on the potential FPSO projects worldwide as it aims to be a
top 4 player by 2013-14. It is currently tendering for 5-6 projects (i.e.
Kraken, Madura, C7, Kamelia, Belud) and has the capacity to take up
2-3 new projects p.a.. We do not rule the prospect of Perisai entering
the Malaysia-based FPSO market with Emas Offshore as its potential
strategic partner. Yinson and SapuraKencana are the most recent
entrants into the FPSO market. The former, in partnership with PTSC,
secured a 7+3-year USD737m contract for the Lam Son project in
Vietnam. The latter owns a 50% stake in FPSO Berantai for the field
project, which will be deployed for production by 2H12.
Summary of companies (calendarised)
Company Rec Price TP EPS (sen) EPS Grth (%) PE (x) DPS (sen) Yield (%) (RM) (RM) 12F 13F 12F 13F 12F 13F 12F 13F 12F 13F
Bumi Armada
Buy 4.09 4.88 18.2 21.4 37.5 17.8 22.4 19.0 0.0 0.0 0.0 0.0
Perisai
Buy 0.895 1.20 10.7 10.8 278.2 1.4 8.4 8.3 0.0 0.0 0.0 0.0
SapuraKencana
Buy 2.25 2.68 12.0 13.3 44.2 10.8 18.6 16.8 0.0 0.0 0.0 0.0
Yinson
Buy 2.15 2.54 17.3 23.5 (50.1) 36.0 12.3 9.0 2.5 2.5 1.2 1.2
Sources: Maybank-IB, Bloomberg
Overweight (unchanged)
Wong Chew Hann [email protected] (603) 2297 8688 Chong Ooi Ming [email protected] (603) 2297 8676
21 June 2012 Page 2 of 26
Oil & Gas - FPSO 17 October 2011
Fundamental outlook and prospects
Energising and rewarding. We see exciting prospects in the floating,
production, storage and offloading (FPSO) market, with our positive
outlook underpinned by enlivening macro and micro fundamental
indicators. The steadying oil price environment {Brent crude
>USD70/bbl, <USD120/bbl}: (i) supports sustained E&P spending and
(ii) aids higher project sanctions.
Gaining momentum as the preferred solution. As field development
moves towards remote, marginal and deepwater prospects, FPSO
vessels are also the preferred solution vis-à-vis other asset options (i.e.
fixed platforms, SPAR) as it compares favourably on economic (i.e.
financial costs), engineering (i.e. design, delivery time-span) and
geological (i.e. water depth, field reserves) aspects. This is reflected in
the increasing number of FPSOs entering the market, from 67 units in
2001 to 158 in 2011, equating to a modest 10-year CAGR of 9%.
O&G: Projected break-even hurdle costs O&G: Production cost and type of field development
250
200
150
100
50
20351980
Current hurdle
rate~ USD55
1995 2008 2020
History Projections
High price
Low price
base price
Production Cost (USD/ bbl)
0
20
40
60
80
100
0 1,000 2,000 3000, 4,000 5,000 6,000 7,000 80,00 9,000
EOR
Oil
Shale
Prod‟
ucedMiddle
East
Gas to
Liquids
Heavy
Oil
Production Cost (USD/ bbl)
b’ boe
Deepwater & Ultra Deepwater
OtherConventional
Arctic
Sources: IEA, Maybank-IB Sources: Infield Systems Limited, Maybank-IB
Trend of FPSOs in service or available FPSO fleet utilization rate and idle units
17 20 21 23 27 29 3343 48
62 67 6379 83 90
104108
117139
144
146
148152
2 1 1 1 1 2 33
5
53 4
6
67 1 3
5
5
11 9 11 7
10
40
70
100
130
160
190
90 92 94 96 98 00 02 04 06 08 10 12 YTD
Units in service (LHS) Idle units (LHS)(FPSO units)
2
1 1 1 1
2
3 3
5 5
3
4
6 6
7
1
3
5 5
11
9
11
7
88
90
92
94
96
98
100
0
2
4
6
8
10
12
90 92 94 96 98 00 02 04 06 08 10 12 YTD
Idle units (LHS) Utilisation rate (RHS)(FPSO units)
Average utilisation rate: 94%
(%)
Sources: International Maritime Associates, Upstream, Maybank-IB Sources: International Maritime Associates, Upstream, Maybank-IB
21 June 2012 Page 3 of 26
Oil & Gas - FPSO 17 October 2011
43 FPSO contracts were awarded in 2009-2011 (averaging 14 units
p.a.). Order momentum has picked up in tandem with the recovery in
E&P spending. Of these awards, we observed the following trends:
(i) FPSO conversions were the preferred construction
method, largely due to its faster delivery period (averaging 18-
24 months), the availability and affordability of tankers (due to a
global oversupply) and cost economics (i.e. tailored to fit a
field‟s reserve requirements). 20 units of FPSO ordered were
conversions, followed by newbuilds (13) and redeployments (10
units).
(ii) Orders were largely for small- to mid-sized FPSOs. 65%, or
28 units of the FPSOs ordered were small (15 units) and
medium (13 units) sized units, with production capacity ranging
up to 80,000 and 150,000 bpd. 15 units were large-sized FPSO
orders, catering mainly to Petrobras‟ projects in Brazil.
(iii) Brazil was the single largest market for FPSOs, making up
30% of the orders. The FPSOs were to cater for Petrobras‟ field
development projects, notably the deepwater and pre-salt
fields. Petrobras ordered 8 FPSOs for its pre-salt fields in 2010.
The Asia-Pacific region accounted for 11 of the orders –
Australia (3), Malaysia (2), Indonesia (2), Vietnam (2), China
and India (1 each), largely deployed for shallow and marginal
field projects.
(iv) FPSO charters were largely leased contracts. Leased
contracts made up 22 of the 43 FPSO orders in 2009-11,
accounting for 51% of the market. The lessors were SBM (5
units), Bumi Armada (3), Teekay (3), BW Offshore (2),
Bluewater (2), Modec (2), EOC (1), Saipem (1), Sevan (1),
Berlian Laju Tanker (1) and Petrofac-SapuraKencana (1).
Snapshot of FPSO contract characteristics
FPSO contract awards
Newbuilds
Normally owned
USD 0.8–2b capex
3-4 years construct
-ion
Conversions
Normally leased
USD250-800m capex
2-3 years construct
-ion
Redeployments
Normally leased
At least USD5mcapex
3-12 months upgrade
Source: IHS
Global E&P spending
-5
10
25
40
55
70
85
100
200
350
500
650
2005 2006 2007 2008 2009 2010 2011 2012F
Global E&P Spend (LHS) WTI Crude (RHS)(USD b) (USD/barrel)
Sources: Barclays Capital, Maybank-IB
21 June 2012 Page 4 of 26
Oil & Gas - FPSO 17 October 2011
(v) New players entering the FPSO market. OSX (Brazil) and
SapuraKencana (Malaysia) were among the new players
joining the FPSO charter markets (with contracts in hand). The
emergence of these newcomers coincided with the requirement
for local content/ownerships/shipyard owners, and the opening
up of field development to domestic oil & gas service providers.
These players are backed by their respective national oil
companies (NOCs) i.e. Petrobras and PETRONAS.
** Yinson is the latest to join the FPSO market following its
partnership with PTSC (Vietnam) for the Lam Son project.
(vi) Consolidation in the FPSO market. These new entrants were
offset by consolidation within the sector.
FPSOcean filed for bankruptcy in 2009 despite the sale of
its partially completed FPSO to Ramunia.
Petroprod sold its under-construction FPSO in 2009 to
SembCorp‟s Jurong Shipyard; the vessel was finally taken
up by Teekay.
Oceaneering exited the industry in 2010, having sold its
ageing FPSO for scrap, to refocus on its core diving
support business.
BW Offshore acquired Prosafe Production in 2010, which
comprised 8 FPSOs, 2 FSOs and one tanker.
Teekay acquired Sevan‟s 3 FPSOs in 2011, which were on-
contract, and also the option to buy 2 speculative newbuild-
hulls located in China
(vii) Costs escalate, contracts are longer. On average,
the conversion cost of a FPSO has gradually stepped up,
from USD720m per unit in 2009 to USD755m in 2010 and
USD770m in 2011;
while FPSO contracts tenures (measured on the firm
portion of the contract) enjoyed longer duration, from 12
years in 2009 to 15 years in 2010 and 16 years for 2011;
project IRRs averaged around 10%, and project financing
hovered around a 70:30-80:20 debt:equity ratio, depending
on the balance sheet strength of the respective firms and
the availability of corporate guarantees from oil majors.
The gradual increase in FPSO conversion cost….. ….is supported by lengthening (firm) tenures
717.8
755.0
777.2
700
720
740
760
780
2009 2010 2011
Average capex per vessel (USD m)
12
15
16
10
12
14
16
18
2009 2010 2011
Average no of years for firm contract tenure(years)
Sources: International Maritime Associates, Upstream, Maybank-IB
Sources: International Maritime Associates, Upstream, Maybank-IB
21 June 2012 Page 5 of 26
Oil & Gas - FPSO
Sources: International Maritime Associates Inc, Upstream, Maybank-IB *a single order comprising 8 hulls
FPSO contracts awarded YTD from 2009
Award date
Company Field Water
depth (m) Oil Company Country Ownership Construction type Shipyard
Contract terms (Charter years or EPC)
2009 SBM Offshore Aseng 1,000 Nobel Guinea Leased Conversion Keppel 15 yrs + 5 yrs
2009 BWO Papa-Terra 1,200 Petrobras Brazil Owned Conversion Cosco Dalian EPC
2009 EOC Chim Sao 95 Premier Oil Vietnam Leased Conversion Keppel 6yrs + 6yrs
2009 Bumi Armada TGT 43 Hoang Long Vietnam Leased Conversion Keppel 7yrs + 8 yrs
2009 Saipem Aquila 815 ENI Italy Leased Conversion Dubai DryDocks 20yrs
2009 Bluewater Nan Hai 115 CNOOC China Leased Redeployment Batam 1yr -1.5 yrs
2009 SBM Offshore Baleia Azul 1,200 Petrobras Brazil Leased Redeployment Keppel 18yrs
2010 Bluewater Kitan 344 ENI Australia/ Timor Leste Leased Redeployment Jurong 5yrs + 5yrs
2010 Modec Guara-Sapinhoá Pilot 2,140 Petrobras Brazil Leased Conversion Cosco Dalian 20yrs
2010 OSX Waimea 130 OGX Brazil Owned Conversion Samsung EPCI
2010 BWO TSB 100 Kangean Energy Indonesia Leased Conversion Jurong 10yrs + 4 yrs
2010 BWO Athena 130 Ithaca UK Leased Redeployment Dubai DryDocks 3yrs + 5 yrs
2010 SBM Offshore Lula Nordeste 2,131 Petrobras Brazil Leased Conversion Keppel 20yrs
2010 Hyundai Goliat 340 ENI Norway Owned Newbuild Hyundai EPC
2010 Sevan Huntington 120 E.ON UK Leased Redeployment Nymo 5yrs
2010 BLT Pagerungan 75 Kangean Indonesia Leased Redeployment Jurong 4yrs
2010 Petrofac Cendor Ph.2 70 Petrofac Malaysia Owned Conversion SapuraKencana EPC
2010 Daewoo CLOV 1,290 Total Angola Owned Newbuild Daewoo EPCC
2010 Teekay Bauna/Piracaba 277 Petrobras Brazil Leased Conversion Jurong 9yrs + 6yrs
2010 Teekay Aruana 980 Petrobras Brazil Leased Redeployment Aibel 2yrs
2010 Sembcorp (Jurong)
Roncador 1,600 Petrobras Brazil Owned Conversion Jurong EPC
2010 Keppel Parque das Baleias 1,400 Petrobras Brazil Owned Conversion Keppel EPC
2010 Petrobras (Engivix/GVA/ COSCO)
Pre-salt fields* 1,500 Petrobras Brazil Owned Newbuild Rio Grande Sul shipyard
EPCC for 8 units
2011 SBM Offshore Waimea 130 OGX Brazil Owned Conversion Keppel EPCI
2011 Petrofac Berantai 75
Petrofac/
Petronas Malaysia
Lease/
Owned Redeployment Keppel 7yrs
2011 Hyundai Quad 204 424 BP UK Owned Newbuild Hyundai EPC
2011 Modec Cernambi Sul 2,300 Petrobras Brazil Leased Conversion Cosco Dalian 20yrs
2011 Modec Waikiki Pero Inga (OSX 3)
110 OSX Brazil Owned Conversion Jurong EPCI
2011 OSX Campos Basin TBD OGX Brazil Owned Conversion TBD EPCI
2011 OSX Campos Basin TBD OGX Brazil Owned Conversion TBD EPCI
2011 McDermott Crux liquids TBD Nexus Energy Australia Owned Newbuild TBD EPC
2011 SBM Offshore Block 15/06 - Ngoma 1,421 ENI/Sonangol Angola Leased Redeployment Keppel 12yrs
2011 SBM Offshore Lula Nordeste 2,100 Petrobras Brazil Leased Conversion Keppel 20yrs
2011 Teekay Knarr 410 BG Norway Leased Newbuild Samsung 6yrs+14 or 10yrs+10
2011 Bumi Armada Balnaves 150 Apache Australia Leased Redeployment Keppel 4yrs+4
2011 Bumi Armada D1 85 ONGC India Leased Conversion Keppel 7yrs + 6yrs
21 June 2012 Page 6 of 26
Oil & Gas - FPSO 17 October 2011
Snapshot of FPSOs currently deployed
There are currently 159 FPSOs in the world. Of the total inventory,
152 units are currently in service worldwide while 7 units are reported
as off field and available for reuse, down from 11 units a year ago.
Utilisation is high, at 96%. The Asia Pacific region (i.e. Asia and
Oceania) has the largest count, with 48 FPSOs in operation. This is
followed by the Americas (39): Latin (32), Central (5) and North (2),
Africa (38), Europe (23) and the Mediterranean (4).
Current deployment of global FPSO fleet: 159 units in the field
Legend
Number of FPSOs deployed in the region
Gulf Of Mexico
Australia/
NZ
Brazil
Far East
5
2
14
Canada
Northern
Europe
23
Africa
13
Mideast/
SW Asia
Mediterranean
3220
South East Asia38
7 Units of fhire
4
1
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
Idle FPSOs available for hire
FPSO Owner Age profile (year)
Lease/ own
Type Processing capacity Storage capacity
Turret mooring system
Oil (bpd) Gas (mmscf)
Front Puffin Sea Production/ Rubicon
1990 Lease Conversion 40,000 - 730 Disconnectable
Munin Bluewater
1997 Lease Conversion 60,000 - 595 Submerged
production Lewek Arunothai Ezra/EOC
1980 Lease Conversion 6,000
(condensate) 175 725 Spread moored
Cossack Pioneer Petrofac
1972 Lease Conversion 150,000 115 1,150 External
Falcon SBM
1975 Lease Conversion 165,800 118 2,200 External
Noble Seillean Noble
1990 Lease Newbuild 24,000 12 300 Dynamic positioning
Nan Hai Kai Tuo ConocoPhillips
1992 Own Conversion 90,000 - 1,000 Internal discon-nectable
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
21 June 2012 Page 7 of 26
Oil & Gas - FPSO 17 October 2011
10 new FPSOs were ordered to date (up to Jun 2012). In the first six
months of 2012, 10 units of FPSOs have been ordered, of which 8 are
new vessels while 2 are redeployments of existing FPSOs. These
vessels are scheduled to hit the market from 2012 to 2017.
FPSO contracts awarded in 2012
Company Field Oil company Country Ownership Shipyard Construction
type
Daewoo Ichthys Inpex Australia Owned Daewoo Newbuild
Blue Marine Mexican GOM Sea Production Gulf of Mexico Leased Keppel Redeployment
Blue Water Alma/Galia Enquest UK Owned Blohm & Voss Redeployment
PTSC/Yinson Thang Long/ Dong DO PetroVietnam/ Petronas Vietnam Leased Keppel Conversion
SBM Sapinhoá North Petrobras Brazil Leased CSSC Conversion
SBM Fram Shell UK Leased TBD Conversion Odebrecht/UTC/ OAS
Franco/Transfer of Rights pre-salt area*
Petrobras Brazil Owned Inhauma Shipyard Conversion
Sources: International Maritime Associates Inc, Upstream, Maybank-IB * a single order comprising 4 hulls
Current order backlog for FPSOs worldwide stands at 40 units,
consisting of 20 conversions, 14 newbuilds and 6 currently being
modified for re-deployment. Not included in the 40 units, are 3
speculative newbuild orders without field contracts (Sevan – 2 units,
Ramunia – 1 unit). Brazil currently dominates, with orders for 25 FPSOs
(16 conversions, 8 newbuilds and 1 redeployment), including 12 serial
pre-salt units. The underlying growth in Brazil is largely due to: (i)
Petrobras’ plans to develop a new pre-salt province entailing at
least 40 large-scale FPSOs and (ii) compliance with local content
clauses for FPSOs (up to 65%).
FPSOs in the pipeline – 40 units on order
Legend
Australia/
NZ
Brazil
Northern
Europe
Africa
South East Asia
Number of newbuild FPSOs to be deployed per region
3 Speculative units without contracts in hand
Gulf Of Mexico
Mideast/
SW Asia
1
1
1
1
16
8
1
1 1
1
1 1
2
3
1
Number of converted FPSOs to be deployed per region
Number of FPSOs to be redeployed per region
Sources: International Maritime Associates Inc, Maybank-IB
21 June 2012 Page 8 of 26
Oil & Gas - FPSO 17 October 2011
FPSO outlook - positive
The FPSO market is at an early stage of the demand cycle, in our
view, with ample room for growth. Projection-wise, 200-250 new orders
for FPSOs are expected to enter the market over the next 5 years. The
orders are categorised into 2 core groups for: (i) visible and (ii) future
emerging projects.
(i) Visible projects: In the planning pipeline are 125 firm projects
that potentially could require FPSOs should the projects go to
development. FPSOs are the preferred production solution for 100
of these projects. The remaining 25 projects could require either
FPSOs or other types of production solutions (i.e. tension-legged
platform (TLP), semi-submersibles, SPAR). With a few exceptions,
all the projects are declared discoveries, some of which will require
multiple FPSOs for development.
(i) Future emerging projects: A reasonable estimate is that 75 to
125 FPSO projects will emerge over the next five years that are
not now visible. This estimate is based on an assessment of the
number of projects in the current planning list and were not visible
a few years ago.
FPSO: Supply and demand
20161998 2000 2004 20122006 20142008 20102002
250
200
150
100
50
199619941990 1992
(Units)
250
200
150
100
50
Producing FPSOs Idle units re employed High demand Base Low demand
Source: IHS
1. Sensitivities of projects
Insensitive
Based on the analysis of the 125 potential FPSO projects, it is
estimated that about 30% are relatively insensitive to short-term
market conditions.
21 June 2012 Page 9 of 26
Oil & Gas - FPSO 17 October 2011
The decision to proceed will be based on long-term oil price
assumptions and potential of the project to build reserves.
The need to replace reserves and the opportunity to exploit large
hydrocarbon complexes provide continuous momentum for project
development.
This grouping comprises big projects involving large reservoirs
offshore Brazil and West Africa.
Sensitive
40% of the 125 projects are considered opportunistic projects,
which require a robust oil price environment to proceed.
They generally involve projects with relatively small reserves and
non-major oil operators.
These groupings are projects located in South East Asia.
Somewhat sensitive: 50/50
30% of the visible 125 FPSO projects are considered somewhat
sensitive to short term market conditions, where to some degree,
underlying short- to mid-term crude oil prices are taken into account
in making an investment decision.
These projects are spread over a wide spectrum of geographical
areas and generally involve fields with mid-size recoverable
reserves, heavy oil or difficult access.
Most likely scenario: 100-140 units by 2015. In our view, there will be
orders for 100 to 140 FPSOs over the next five years, averaging 20-28
new units p.a. over 2012-2015. This includes new units and
redeployments, which will generate capital expenditure (capex) of
USD65b-85b over this period. The bulk of the variation between the
three scenarios is in the small- to mid-size FPSO orders.
An 80:20 ratio for newbuilds and conversions vs. redeployments.
We gauge that 80% of the new FPSO orders will be satisfied via newly
built or converted units, while the remaining 20% of the FPSO projects
will be on a redeployment basis. All redeployments are likely to consist
of small- to mid-sized FPSOs.
Forecasted FPSO new orders over the next 5 years – 3 scenarios
Low case
Oil price: USD70-90/ bbl
Reasonable case
Oil price: USD90-110/ bbl
High case
Oil price: > USD110/ bbl
Types of FPSO Capex (USD’b)
Unit Capex (USD’b)
Unit Capex (USD’b)
Unit Capex (USD’b)
Large FPSOs
New converted units with 150-250,000 bpd 1.20 26 31.2 28 33.6 30 36.0
Topsides pre-salt hulls 0.80 8 6.4 8 6.4 8 6.4
Midsize FPSOs
New converted units with 80-150,000 bpd 0.60 24 14.4 29 17.4 34 20.4
Topside spec hulls 0.25 3 0.8 3 0.8 3 0.8
Modified redeployed FPSOs 0.30 3 0.9 4 1.2 5 1.5
Small FPSOs
New converted units below 80,000 bpd 0.40 25 10.0 34 13.6 42 16.8
Modified redeployed FPSOs 0.15 11 1.7 14 2.1 18 2.7
Total 100 65.4 120 75.1 140 84.6
Sources: International Maritime Associates Inc, Maybank-IB
21 June 2012 Page 10 of 26
Oil & Gas - FPSO 17 October 2011
Snapshot of FPSO orders over the next 5 years – by size
34 36 38
3036
42
36
48
60
78
100
120
140
0
40
80
120
160
Past five years Low scenario: USD 70-90 oil
Base scenario: USD 90-110 oil
High: scenario: USD 110-150 oil
(Units) Large FPSOs Midsize FPSOs Small FPSOs Series4
Sources: International Maritime Associates, Inc, Maybank-IB
Buoyant environment for the FPSO market over the next two
years. Putting things into perspective, the demand-supply outlook for
FPSOs appears promising. We expect 15-20 firm FPSO awards for
2012-13 (medium-term outlook). Based on the project pipeline,
upcoming projects will most likely come from Asia-Pacific and Africa,
and involve leased conversions.
Chronology of idle FPSOs
Company Vessel 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012
Bumi Armada Griffin Venture Off-hire Off-hire Hired Hired Hired Sea Production Crystal Ocean Off-hire Off-hire Off-hire Off-hire Hired
Bluewater Uisge Gorm Off-hire Off-hire Off-hire Off-hire Sold to Enquest
Wooside Cossack Pioneer Off-hire Off-hire Sold to Petrofac Off-hire Off-hire
PetroVietnam Ruby Princess Off-hire Scrapped - - -
PTTEP Challis Venture Off-hire Scrapped - - -
PTTEP Jabiru Venture Off-hire Scrapped - - -
SBM Falcon Off-hire Off-hire Off-hire Off-hire Off-hire
Nobel Seillean Off-hire Off-hire Off-hire Off-hire Off-hire
Sea Production Front Puffin Off-hire Off-hire Off-hire Off-hire Off-hire
ConocoPhillips Nan Hai Kai Off-hire Off-hire Off-hire Off-hire Off-hire
Ezra/ EOC Lewek Arunothai Hired Hired Hired Off-hire Off-hire
CNOOC Hai Yang Shi You (overhaul) (overhaul) (overhaul) (overhaul) Off-hire (overhaul)
Total units off- hire and available 11 8 7 8 7
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
21 June 2012 Page 11 of 26
Oil & Gas - FPSO 17 October 2011
Opportunities – screening and selecting prospects
Target, focus and criteria. Based on the set criteria (i.e. geographical
and geological traits, technical traits, field operations), we gauge that
the FPSO lease operators under our coverage (i.e. Bumi Armada,
Yinson, Perisai) will most likely focus on:
(i) small-sized FPSO projects, (ii) converted FPSOs, (iii) the Asian and
African markets, and (iv) oil companies that typically lease FPSOs
(still developing their own skill sets or balance sheet strength).
Screening prospects
(i) Geographical & geological traits
- Water depth: shallow water most likely - Region: Asia Pacific preferred, followed by Africa
(ii) Technical traits
- Size of FPSO: Preferably small, medium is possible - Design: Conversions and redeployments. Newbuilds ruled out due to capex
and balance sheet constraints.
(iii) Field operators
- Small independent operators with small balance sheet that can afford only leases
- New NOCs seeking JVs to build up technical capabilities
(iv) Production timeline
- Planned first oil/ gas production by 2015 (latest)
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
Selecting prospects: 21 projects passed criteria. Based on these settings, of the 120 projects identified, 21 projects passed our internal screening criteria. They are located in 8 countries: Malaysia (6), Indonesia (5), Vietnam (4), India (2), Australia (1), Nigeria (1), the Philippines (1) and United Kingdom (1).
Snapshot of projects that fit Maybank-IB’s selection screening criteria
Status Country Field Operator Water depth (m)
First oil possible
Planned or being studied Australia Lady Nora Woodside 80 2014
Bidding/ final design India C7 ONGC 85-90 2013
Planned or being studied India GS 29 ONGC 80-12 2014
Bidding/ final design Indonesia Salawati PetroChina 75 2013
Bidding/ final design Indonesia Madura BD Husky/CNOOC 55 2014 Planned or being studied Indonesia Badik Anadarko 70 2014 Planned or being studied Indonesia Ande Ande Lumut Awe 100 2014 Bidding/ final design Indonesia Bukit Tua Petronas 100 2014 Bidding/ final design Malaysia Kamelia Petronas/ Hess 55 2013
Planned or being studied Malaysia Bunga Dahlia and Teratai Petronas 65-70 2014
Bidding/ final design Malaysia Belud Hess 155 2014
Planned or being studied Malaysia E6 Shell 100 2014
Planned or being studied Malaysia NC3/Spaoh Petronas 80 2014
Planned or being studied Malaysia Balai Cluster Roc Oil 60 2015
Planned or being studied Nigeria Bilabri/ Orobiri Peak 40-300 2014 Planned or being studied The Philippines West Linapucau Pitkin Petroleum 350 2014
Bidding/ final design UK Kraken (Blk 9/2b) EnQuest 100 2015
Bidding/ final design Vietnam Ham Rong (Blk 102/106) Petronas 25-30 2013
Planned or being studied Vietnam Lac Da Vang PetroVietnam 48 2013
Bidding/ final design Vietnam Gau Chua PetroVietnam/Petronas 120 2014
Planned or being studied Vietnam Dai Nga Idemitsu 120 2015
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
21 June 2012 Page 12 of 26
Oil & Gas - FPSO 17 October 2011
Companies’ prospects
Bumi Armada (BAB MK; BUY; TP: MYR4.88). We reckon Bumi
Armada is best placed to capitalise on the prospect of strong global
FPSO demand. It has the balance sheet to fund 2-3 new FPSOs p.a.,
and the execution track record and engineering skill sets to deliver
FPSOs on time. We understand that that it is currently bidding for 6-8
tenders including Kraken (UK), Kamelia, Belud, E6 (Malaysia), Madura
(Indonesia) and Cluster 7 (India).
Perisai (PPT MK; BUY; TP: MYR1.20). We do not rule out the
possibility of Perisai partnering with Emas Offshore (EOC) to charter an
FPSO for the Kamelia gas field project. EOC was recently awarded a
Letter of Intent (LOI) from Hess, beating several keen competitors, due
to its ability to rapidly deliver an FPSO, by 2013 in this case. It will likely
modify the FPSO Arunothai to suit the field‟s production requirements.
Yinson (YNS MK; BUY; TP: MYR2.54). Yinson is the new kid on the
FPSO block. It recently clinched its first FPSO job via a JV with
PetroVietnam Technical Services Corporation (PTSC) for the Lam Son
project. The 7+3-year FPSO bare-boat contract worth USD737.3m
requires an FPSO with 18,000 bpd processing capacity and storage for
350,000 bbls. The FPSO will be converted in Singapore, costing c.
USD400m in capex.
SapuraKencana Petroleum (SAKP MK; BUY; TP: MYR2.68). It will
partner Petrofac on a 49:51 basis to own and charter the FPSO
Berantai (formerly known as FPSO East Fortune) for the development
of the Berantai field. The lease contract charter is for a firm 7 years with
the option to extend for another 8 years. Capex for the FPSO is about
USD345m. First gas production is expected in 2H12.
Risks
The FPSO industry‟s wide-ranging operations and geographical profile
exposes operators to a broad spectrum of operational, geographical
and environmental risks. Below is a non-exhaustive list of the major risk
factors faced by FPSO operators.
Global economic conditions and oil price levels affect investment
plans. Oil companies‟ investment plans are dependent on long-term oil
price expectations. Oil field exploration/developments were shelved
when oil prices fell below USD50/bbl (average) in 2008. Our economics
team projects an average crude oil price of USD105-115/bbl (Brent) for
2012-13, which is conducive for oil & gas exploration/development
activities. The FPSO market is also cyclical; an economic slowdown will
affect new sales.
Execution and delayed delivery risks. FPSO contracts encompass
turnkey contracts for the vessels‟ construction, conversion or
refurbishment. Operators face late delivery risk and construction cost
overruns during this phase. FPSO operators are heavily dependent on
multiple vendors throughout the process, for equipment, manpower and
yard space, and need the management expertise to oversee the job.
Post deployment, FPSO operators need to maintain a pre-agreed
commercial uptime. Also, the risk of their contracts being terminated
early is not to be disregarded.
21 June 2012 Page 13 of 26
Oil & Gas - FPSO 17 October 2011
Financial leverage. Operators do and will maintain a significant level of
leverage in line with industry norms. Capex is intensive during the
construction of new FPSOs and extensive refurbishments are required
for the redeployment of FPSOs.
Prospective floating solution projects identified
Country Operator Description
Malaysia PETRONAS/ Hess/
Shell/Roc Oil
• There are up to 3FPSO projects, which could be awarded in Malaysia this year, while another 3 jobs are
expected to roll out in 1-2 years. They are:
Hess‟ SB 302 (Belud @ North Sabah),
Hess‟ PM301/PM325 (Kamelia @ North Malay basin),
Petronas Carigali-Talisman‟s PM302 (Bunga Dahlia and Teratai @ North Malay basin),
Roc Oil‟s Balai Cluster,
Shell‟s SK308 (E6) and
Petronas‟ Spaoh field (NC3)
• The initial 3 are “fast-tracked” projects brought forward to boost Malaysia‟s declining oil production and gas
supply needs; first gas/oil is targeted for 2013- 2014.
• Kamelia: FPSO + wellhead platforms. Hess is understood to have given a Letter Of Intent (LOI) to Emas
Offshore for the supply of a FPSO. This is a fast track program, for Hess is expected to begin the charter
in 1Q2013, though the timeline appears challenging as there is no news yet of a final award being made.
However SapuraKencana has already received a contract in December 2011 to build the wellhead
platform, which in essence firms up the development plan.
Emas has proposed to modifying the FPSO Lewek Arunothai, which became available following the
termination of its charter from the Arthit field offshore Thailand. The FPSO is likely to undergo
modification/refurbishment in Singapore before commencing the contract with Hess.
• Belud: FPSO + wellhead platform. It has been reported that the M3nergy and EMAS Offshore consortium
submitted the lowest bid in a recent tender to lease an FPSO for 7 years firm with options to extend up to
an additional 8 years. However, considering that the FPSO Arunothai will be deployed for the Kamelia
field, Hess is reported to have offered Bumi and Ramunia-MISC a second chance to match the
consortium‟s bid.
• Bunga Dahlia & Teratai: PETRONAS-Talisman‟s Bunga Dahlia/ Teratai projects will require an FPSO for
field development. With both fields targeted to achieve first gas by 2014, we expect contract awards
sometime this year. Should M3Nergy win the Belud job, we reckon either Bumi or Ramunia-MISC could
secure the Bunga Dahlia & Teratai fields.
• Balai Cluster: FPSO + wellhead platform. Roc Oil, Dialog and Petronas have formed a JV to act as the
service contractor group under a risk service contract with payment based on performance indicators. A
small FPSO with limited production capability is being considered for use in the pre-development phase,
which is scheduled to extend over 18 months. Capex for the pre-development phase is estimated between
USD200-250m.
• E6: FPSO. Gas/oil discovery on Block SK308 about 200 km offshore Sarawak. Gas produced on SK308 is
earmarked for delivery by pipeline to the Petronas LNG complex in Bintulu. FPSO would be used to
extract and export oil and condensate. Award envisioned by 2013.
• Spaoh: The Spaoh field (NC3) will likely use an FPSO+ fixed platform, or FLNG. Preliminary indication of
combined reserves is 100 mil bbls oil, 2.8 tcf gas. Further appraisal is being planned. This field will hit first
oil by 2014/16.
India ONGC • ONGC is expected to announce 2 FPSO projects in 1-2 years. They are:
i) Cluster 7 and
ii) GS 29
• Cluster 7: FPSO + wellhead platforms. The project plans to utilize a small FPSO develop the
marginal Cluster 7 oil field off Mumbai. The FPSO for Cluster 7 is required to have 30,000 bpd oil and
63 mmscfd gas processing capacity. Bids for the FPSO submitted in March „12.
• GS 29: FPSO + wellhead platform. This is a shallow water field around 20 km southeast of Kakinada
in water depth of 80 to 120 meters. The project has been around a while. ONGC Has invited
expressions of interest in supplying an FPSO for GS 29, offering a potential 2+3 year lease contract.
Sources: International Maritime Associates, Inc, Upstream online, Maybank-IB
21 June 2012 Page 14 of 26
Oil & Gas - FPSO 17 October 2011
Prospective floating solution projects identified (continued)
Country Operator Description
Vietnam PetroVietnam/
PETRONAS
• There are 4 more FPSO projects on the horizon for Vietnam, 2 of which could be awarded as soon as
end this year. They are:
(i) Ham Rong (Blk 102/106),
(ii) Lac Da Vang,
(iii) Gau Chua and
(iv) Dai Nga
• The Vietnamese market has proven to be exciting enough, kicking-off the action with the award of
Lam Son’s FPSO to Yinson-PTSC.
• Gau Chua-Ca Cho: Petronas/ PetroVietnam are evaluating the use of a small FPSO + wellhead
platforms to develop a marginal field in the South Vietnamese Nam Con Son basin. This shallow
water basin is the largest oil and gas bearing basin in Vietnam. We believe this project will call for a
small FPSO, c. 8,000-10,000 bpd processing capability, with first oil targeted for 2014.
• Ham Rong: This project located in the Gulf of Tonkin (Northern Vietnam) could use an FPSO (c.
25,000 bpd processing) or MOPU + FSO combination; first oil is targeted for 2013. Petronas operates
the block with a 50% interest. Partners are ATI (20%), PetroVietnam (20%) and PetroChina (10%).
• Lac Da Vang: FPSO+ wellhead platforms or MOPU + FSO. This project consists of 2 shallow water
discoveries in the southern part of block 15-1/05. The Lac Da Vang reservoir appears to have very
light 430 API oil. PetroVietnam is the operator with a 40% interest. Total has 35%, SK Energy 25%. A
second discovery, Lac Da Nau lies 15 km to the southwest.
• Dai Nga: FPSO or platform + FSO. Idemitsu operated O&G discovery in the Nam Con Son basin
about 300 km SE of Ho Chi Minh City. Evaluation of the find's commerciality is in progress. First oil
could possibly be in 2015.
Indonesia Anadarko/ Awe/
Husky/ CNOOC/
PetroChina/
PETRONAS
• There are 5 FPSO projects expected to be rolled out in Indonesia for the next 1-2 years. They are:
(i) Husky/ CNOOC‟s Madura BD
(ii) Petronas‟ Bukit Tua,
(iii) PetroChina‟s Salawati,
(iv) Awe‟s Ande Ande Lumut and
(v) Anadarko‟s Badik
• Madura DB: FPSO. Pre-qualification for supply of the FPSO has begun. FPSO EPCI/lease contract
award planned for late ‟12. Lease for 10 yrs + 5 option years. Unit to have capability to process 110
mmscfd gas and 8,000 bpd condensate and store 370,000 bbls. Development plan approved by
gov‟t. Field 60 km offshore, estimated to bbls condensate reserves. Production estimates are 100
mmscfd gas, 6,500 bpd condensates.
• Bukit Tua: FPSO + wellhead platform. Multiple bids for FPSO are currently being evaluated but
M3nergy is tipped to be the lead bidder. The contract calls for a leased unit with 50,000 bpd
processing, 600,000 bbls storage. Cabotage rules require the unit to be Indonesian registered.
• Salawati: FPSO. PetroChina has requested bids for a leased FPSO for use on the Salawati field off
Irian Jaya/Papua. This will be a small unit with storage for 260,000 barrels. BLT is indicated as the
likely supplier of the unit for Salawati but their current financial difficulties raise questions about the
status of their bid.
• Ande Ande Lumut: FPSO + wellhead platform. AWE in early 2012 acquired the Ande Ande Lumut
field from Genting O&G. This shallow water field in northwest Natuna offshore Indonesia has
estimated recoverable reserves of 76 million barrels. AWE plans to utilize a small FPSO with oil
processing capacity or 40,000 bpd. The development paln envisions 43 horizontal wells.
• Badik: FPSO+ wellhead platforms or MOPU + FSO. Oil/gas find in the Tarakan Basin. Exploration
well encountered 133 net feet of oil/gas play. Anadarko operates block with 35% interest.
UK Enquest • Kraken (Blk 9/2b): FPSO. Bids being evaluated for a leased FPSO with capability to process 60,000
bpd oil. Proven reserves estimated at 89 mil bbls, this is a heavy oil field (API 150). Development plan
to be submitted in 3rd qtr „12, with first oil scheduled in 4rd qtr „15. Enquest is operator with 25%
interest. Nautical has 25%, First Oil Expro 30%, Canamens Energy 20%.
Sources: International Maritime Associates, Inc, Upstream online, Maybank-IB
21 June 2012 Page 15 of 26
Oil & Gas - FPSO 17 October 2011
Choice between leased and owned FPSOs among oil companies
1
1
1
1
2
2
2
2
2
2
2
2
3
3
4
4
6
20
12
7
5
2
2
6
3
1
1
7
4
3
2
4
2
2
28
CNOOC
Total
OSX/OGX
Maersk O&G
Hess
BP
Woodside
Apache
Premier
ExxonMobil
Chevron
Petrovietnam
Statoil
Talisman
Murphy
Addx
Kangean
Shell
Petronas
Pemex
CNR
ENI
Petrobras
Leased FPSOs Owned FPSOs
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
Snapshot of global FPSO operators (by lease unit)
1314
8 8
43
1
42
32 2
2
2 2
24
1 1
1
11
0
3
6
9
12
15
18
SBM BW Modec Teekay Bluewater Bumi Armada OSX Maersk Petrofac Fred Olsen Saipem Sea Production
(Units) Existing Fleet On Orderbook Idle
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
21 June 2012 Page 16 of 26
Oil & Gas - FPSO 17 October 2011
Bumi Armada Powering Up
Maintain BUY and MYR4.88 TP. Bumi Armada (BA) offers focused
exposure to the Floating Production, Storage and Offloading (FPSO)
market. As one of the fastest-growing FPSO operators in the world, it
has set its sights on being a top 4 player in terms of FPSO fleet size, by
2013. It is also poised to gain traction in Malaysia‟s O&G sector, as it
leverages on PETRONAS‟ capex programme. BA is a steady growth
stock with balance sheet strength and proven execution capabilities.
Out TP is based on sum-of-parts valuations.
In an entrenched position to ride on global E&P programmes. We
see numerous opportunities for BA to capitalise on the: (i) 125 potential
FPSO projects worldwide, (ii) requirement for new, highly technical
OSVs to support global deepwater programmes, (iii) services for the
subsea umbilicals, risers and flowlines (SURF), inspection, repair and
maintenance (IRM) markets, and (iv) increasing number of offshore
development projects in Malaysia (marginal field and Enhanced Oil
Recovery (EOR) development) and the Caspian region.
Set to embark on an aggressive asset expansion plan. We see BA
prospecting for new assets for growth. BA will likely double its FPSO
assets, triple its SURF vessels and add up to 8 new OSV vessels to its
fleet by 2015. This is possible as it has the balance sheet to support the
heavy capex (estimated at MYR6.4b) for its expansion programme
while keeping its net gearing below the 1.5x threshold.
Powering up - where growth and aspirations meet. We project a 3-
year net profit CAGR of 25%. All divisions will contribute to growth,
fuelled by new vessels progressively coming onstream, and higher
utilisation of its existing vessels. This is a sensible aspiration, which
would propel BA into becoming the fourth largest FPSO operator
globally.
A towering growth stock with rewarding returns. With a 3-year
forecast net profit CAGR of 25%, its relentless pursuit of excellence will
secure Bumi Armada the status of fastest-growing operator among its
global peers. However, given prospects for high growth, we believe that
it is unlikely that BA will reward shareholders with meaningful dividends
in the foreseeable future.
Bumi Armada – Summary Earnings Table
FYE Dec (MYR m) FY10A FY11A FY12F FY13F FY14F Revenue 1,241.4 1,543.9 1,800.7 2,220.6 2,504.3
EBITDA 715.6 845.1 1,048.7 1,272.6 1,442.0
Recurring Net Profit 350.8 387.3 532.6 627.5 706.9
Recurring Basic EPS (Sen) 12.0 13.2 18.2 21.4 24.1
EPS growth (%) 26.4 10.4 37.5 17.8 12.6
DPS (Sen) 0.0 2.5 0.0 0.0 0.0
PER 34.0 30.8 22.4 19.0 16.9
EV/EBITDA (x) 21.0 16.2 13.7 11.7 10.3
Div Yield (%) 0.0 0.6 0.0 0.0 0.0
P/BV(x) 13.6 3.4 3.0 2.6 2.2
Net Gearing (%) 359.0 49.9 61.9 63.2 54.6
ROE (%) 40.1 10.9 13.3 13.5 13.2
ROA (%) 10.8 9.3 9.2 9.2 9.1
Consensus Net Profit (MYR m) - - 554.8 692.2 795.9
Source: Maybank-IB
Buy (unchanged)
Share price: MYR4.09 Target price: MYR4.88 (unchanged)
Wong Chew Hann, CA [email protected] (603) 2297 8688
Chong Ooi Ming [email protected] (603) 2297 8676
Stock Information
Description: Integrated Oilfield services provider with 4 core operations: FPSOs, OSVs, T&I vessels and offshore field services.
Ticker: BAB MK Shares Issued (m): 2,928.5 Market Cap (MYR m): 11,918.8 3-mth Avg Daily Turnover (USD m): 6.16
KLCI: 1,594.98 Free float (%): 27.0 Major Shareholders: %
Objektif Bersatu Sdn Bhd 42.4 Ombak Damai Sdn Bhd 11.3 EPF 6.9 PNB 5.8 Karisma Mesra Sdn Bhd 5.4
Key Indicators
Net cash / (debt) (MYR m): (1,824.7) NTA/shr (MYR): 1.21 Net Gearing (x): 0.5
Historical Chart
3.0
3.3
3.6
3.9
4.2
4.5
Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12
BAB MK Equity
Performance:
52-week High/Low MYR4.50/MYR3.03
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) 4.9 (4.9) (0.2) - (0.7)
Relative (%) 0.8 (6.3) (9.1) - (4.9)
21 June 2012 Page 17 of 26
Oil & Gas - FPSO 17 October 2011
INCOME STATEMENT (MYR m) BALANCE SHEET (MYR m)
FY Dec 2011A 2012F 2013F 2014F FY Dec 2011A 2012F 2013F 2014F
Turnover 1,543.9 1,800.7 2,220.6 2,504.3 Net Fixed Assets 4,201.2 5,274.3 6,247.5 6,840.7
Cost of goods sold (883.1) (984.8) (1,226.2) (1,383.6) Invts in Assocs & JVs 151.3 207.6 264.3 332.0
Gross profit 660.8 815.9 994.4 1,120.7 Other LT Assets 423.3 423.3 423.3 423.3
Other operating (exp)/inc. (142.5) (194.1) (248.7) (285.6) Cash & ST Invts 1,248.5 990.5 1,539.2 1,554.1
EBIT 518.3 621.8 745.7 835.2 Other Current Assets 912.0 965.5 1,053.2 1,112.4
Net int (exp)/ Inc (109.2) (113.0) (138.2) (155.7) Total Assets 6,936.2 7,861.3 9,527.5 10,262.5
Associates & JV 26.8 56.3 56.7 67.7
Exceptional gain/ (loss) (27.7) 0.0 0.0 0.0 ST Debt 447.4 447.4 447.4 447.4
Pretax profit 435.9 565.2 664.3 747.2 Other Current Liab 353.1 373.1 405.7 427.8
Tax (70.6) (27.0) (30.8) (34.3) LT Debt 2,559.8 3,000.0 4,000.0 4,000.0
Minority interest (5.7) (6.0) (6.0) (6.0) Other LT Liab 33.2 33.2 33.2 33.2
Net profit 359.7 532.2 627.5 706.9 Shareholders Equity 3,528.0 3,987.0 4,614.5 5,321.4
Net profit ex EI 387.3 532.2 627.5 706.9 Minority Interest 14.7 20.7 26.7 32.7
Total Cap. & Liab 6,936.2 7,861.3 9,527.5 10,262.5
EBITDA 845.1 1,048.7 1,272.6 1,442.0
Sales Growth (%) 24.4 16.6 23.3 12.8 Share capital 2,928.5 2,928.5 2,928.5 2,928.5
EBITDA Growth (%) 18.1 24.1 21.4 13.3 Net Debt 1,758.7 2,456.9 2,908.2 2,893.3
EBIT Growth (%) 10.9 20.0 19.9 12.0 Working capital 1,360.0 1,135.6 1,739.3 1,791.2
Effective Tax Rate (%) 16.2 4.8 4.6 4.6 Gross gearing 85.2 86.5 96.4 83.6
CASH FLOW (MYR m) RATES & RATIOS
FY Dec 2011A 2012F 2013F 2014F FY Dec 2011A 2012F 2013F 2014F
Net profit 387.3 532.2 627.5 706.9 Gross Margin (%) 42.8 45.3 44.8 44.8
Dep. & amortization 326.8 426.8 526.8 607.8 EBITDA Margin (%) 54.7 58.2 57.3 57.6
Chg. In working capital (596.6) (33.6) (55.0) (37.1) EBIT Margin (%) 33.6 34.5 33.6 33.3
Other operating CF 212.6 (50.3) (50.7) (61.7) Net Profit Margin (%) 25.1 29.6 28.3 28.2
Operating CF 330.2 875.1 1,048.7 1,215.8 ROAE (%) 17.6 14.2 14.6 14.2
Net capex (1,058.7) (1,500.0) (1,500.0) (1,200.0) ROA (%) 9.3 9.2 9.2 9.1
Chg in LT investment 0.0 0.0 0.0 0.0 ROCE (%) 9.7 10.2 10.2 10.2
Chg in other assets (1,058.7) (1,500.0) (1,500.0) (1,200.0) Div Payout Ratio (%) 17.9 0.0 0.0 0.0
Investment CF (1,167.6) (1,500.0) (1,500.0) (1,200.0) Interest Cover (x) 4.7 5.5 5.4 5.4
Net chg in debt (410.4) 440.2 1,000.0 0.0 Debtors Turn (days) 60.3 70.4 68.6 71.5
Chg in other LT liab. 2,218.5 (73.2) 0.0 0.0 Creditors Turn (days) 90.7 63.1 60.2 63.1
Other financing CF 0.0 0.0 0.0 0.0 Inventory Turn (days) 0.6 0.6 0.6 0.6
Financing cash flow 1,808.1 367.0 1,000.0 0.0 Current Ratio (x) 2.7 2.4 3.0 3.0
Net cash flow 970.7 (258.0) 548.7 15.8 Quick Ratio (x) 2.7 2.4 3.0 3.0
Net Debt/Equity (x) 0.5 0.6 0.6 0.5
Capex to Debt (%) 0.4 0.4 0.3 0.3
N.Cash/(Debt)PS (sen) (60.1) (83.9) (99.3) (98.8)
Opg CFPS (sen) 31.6 31.0 37.7 42.8
Free CFPS (sen) (24.9) (21.3) (15.4) 0.5
Sources: Company, Maybank-IB
21 June 2012 Page 18 of 26
Oil & Gas - FPSO 17 October 2011
Perisai Petroleum Building Traction, Creating Waves
Maintain BUY; TP at MYR1.20. We remain positive on Perisai‟s growth
prospects, management focus and balance sheet strength. It could next
feature in Malaysia‟s FPSO scene with Ezra, as it seeks to leverage on
EOC‟s assets and experience. Recall that Hess has given a Letter of
Intent to EOC‟s unit, EMAS Offshore, to charter an FPSO for the North
Malay basin field. A successful FPSO partnership with Ezra would
catapult Perisai onto a new growth path and reinforce our conviction
BUY call. Our TP pegs Perisai at 11x 2013 EPS.
An FPSO venture in the pipeline? We think Perisai could move into
the FPSO charter market for its next Malaysian project. This will be
positive and would be a catalyst for growth. Its major shareholder Ezra
will likely play a role, for the targeted project and FPSO (i.e. Arunothai)
is owned by Ezra‟s 46.5%-associate EOC. Based on our back of the
envelope calculation, Perisai should recognise net profit of MYR23m-
27m p.a. assuming (i) a 50% stake on a USD250m-300m asset cost, (ii)
70:30 debt-to-equity financing and (iii) 20% ROE.
Balance sheet prudence to match growth aspiration. While Perisai
is the preferred (but not exclusive) partner and distribution channel for
Ezra in the Malaysia O&G market and could ride on Ezra‟s experience
and skill sets in the floating solutions space, Perisai is risk- and balance
sheet-conscious. The size of its balance sheet and opportunities ahead
will dictate the pace of its growth. With a low net debt of MYR224m
translating to net gearing of 0.7x, Perisai could leverage up by a further
MYR500m while keeping its net gearing level below the 1.5x threshold.
Changes at the shareholder level. Managing Director, Zainol Izzet
Mohamed Ishak has exercised an option to acquire 66m Perisai shares
at 48.5sen per share granted to him by HCM Logistics Limited (HCM), a
subsidiary of Ezra. Upon the completion of the exercise, Zainol Izzet will
be the fourth largest shareholder of Perisai with a 7.7% stake, while
Ezra‟s stake will diminish to 16.1% from 23.8%. We view this positively,
as it will strengthen Zainol Izzet‟s commitment to take Perisai to a
higher level.
Perisai Petroleum – Summary Earnings Table
FYE Dec (MYR m) 2010A 2011A 2012F 2013F 2014F Revenue 75.2 82.4 186.3 187.1 188.1 EBITDA 39.9 52.6 142.9 145.9 148.9 Recurring Net Profit 10.3 21.3 91.0 92.3 92.4 Recurring Basic EPS (Sen) 1.5 2.8 10.7 10.8 10.8 EPS growth (%) (72.6) 87.8 278.2 1.4 0.1 DPS (Sen) 0.0 0.0 0.0 0.0 0.0 PER 59.5 31.7 8.4 8.3 8.3 EV/EBITDA (x) 8.8 7.8 4.3 3.3 2.4 Div Yield (%) 0.0 0.0 0.0 0.0 0.0 P/BV(x) 2.6 2.1 1.7 1.4 1.2 Net Gearing (%) 70.6 69.5 97.3 55.8 26.7 ROE (%) 4.4 5.7 18.3 15.4 13.2 ROA (%) 4.3 5.4 12.0 10.2 9.6 Change in net profit (%) n.a. n.a. n.a. n.a. n.a. Consensus Net Profit (RM m) n.a. n.a. 88.2 91.0 91.7
Source: Maybank-IB
Buy (unchanged)
Share price: MYR0.895 Target price: MYR1.20 (unchanged)
Wong Chew Hann, CA [email protected] (603) 2297 8688
Stock Information
Description: An oil & gas service provider owning a MOPU, a pipelay barge and 8 OSVs Ticker: PPT MK
Shares Issued (m): 851.8 Market Cap (MYR m): 758.1 3-mth Avg Daily Turnover (USD m): 1.35 KLCI: 1,594.98
Free float (%): 46.7 Major Shareholders: % Ezra 23.8
Mercury Pacific Marine 10.6 Lynear Plus 8.2
Key Indicators
Net cash / (debt) (MYR m): (387.4) NTA/shr (MYR): 0.15 Net Gearing (x): 1.0
Historical Chart
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12
PPT MK Equity
Performance:
52-week High/Low MYR1.04/MYR0.455
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) 5.3 (2.2) 31.9 16.3 20.3
Relative (%) 1.2 (3.6) 23.0 14.0 16.1
21 June 2012 Page 19 of 26
Oil & Gas - FPSO 17 October 2011
INCOME STATEMENT (MYR m) BALANCE SHEET (MYR m)
FY Dec 2011A 2012F 2013F 2014F FY Dec 2011A 2012F 2013F 2014F
Revenue 82.4 186.3 187.1 188.1 Fixed Assets 500.8 617.0 588.2 559.4
EBITDA 52.6 142.9 145.9 148.9 Other LT Assets 125.6 278.4 278.4 278.4
Depreciation & Amortisation (22.0) (35.8) (36.8) (36.8) Cash/ST Investments 40.9 32.2 162.0 291.9
Operating Profit (EBIT) 30.6 107.1 109.1 112.1 Other Current Assets 109.8 147.9 148.2 148.6
Interest (Exp)/Inc (4.7) (8.0) (10.8) (13.7) Total Assets 777.1 1,075.4 1,176.8 1,278.2
Associates (0.0) 0.0 0.0 0.0
One-offs 0.0 0.0 0.0 0.0 ST Debt 116.5 120.0 120.0 120.0
Pre-Tax Profit 26.9 101.1 101.3 101.4 Other Current Liabilities 114.9 121.1 121.1 121.2
Tax (3.1) (2.3) 0.0 0.0 LT Debt 148.0 337.9 337.9 337.9
Minority Interest (2.6) (7.9) (9.0) (9.0) Other LT Liabilities 24.7 0.0 0.0 0.0
Net Profit 21.3 91.0 92.3 92.4 Minority Interest 51.0 58.9 67.9 76.9
Recurring Net Profit 21.3 91.0 92.3 92.4 Shareholders' Equity 321.9 437.6 529.8 622.2
Total Liabilities-Capital 777.1 1,075.4 1,176.8 1,278.2
Revenue Growth % 9.6% 126.1% 0.4% 0.5%
EBITDA Growth (%) 32.0% 171.5% 2.1% 2.1% Share Capital (m) 753.8 851.8 851.8 851.8
EBIT Growth (%) 58.9% 249.6% 1.9% 2.7% Gross Debt/(Cash) 264.5 457.9 457.9 457.9
Net Profit Growth (%) 107.2% 327.4% 1.4% 0.1% Net Debt/(Cash) 223.7 425.7 295.9 166.0
Recurring Net Profit Growth (%) 107.2% 327.4% 1.4% 0.1% Working Capital (80.7) (61.0) 69.1 199.2
Tax Rate % 11.5% 2.3% 0.0% 0.0%
CASH FLOW (MYR m) RATES & RATIOS
FY Dec 2011A 2012F 2013F 2014F FY Dec 2011A 2012F 2013F 2014F
Profit before taxation 21.3 91.0 92.3 92.4 EBITDA Margin % 63.9% 76.7% 78.0% 79.2%
Depreciation 22.0 35.8 36.8 36.8 Op. Profit Margin % 37.2% 57.5% 58.3% 59.6%
Net interest receipts/(payments) 4.7 8.0 10.8 13.7 Net Profit Margin % 25.8% 48.8% 49.3% 49.1%
Working capital change 26.7 (31.9) (0.2) (0.3) ROE % 7.7% 24.0% 19.1% 16.0%
Cash tax paid (3.1) (2.3) 0.0 0.0 ROA % 3.5% 9.8% 8.2% 7.5%
Others (incl'd exceptional items) (19.8) 0.2 (4.8) (7.7) Net Margin Ex. El % 25.8% 48.8% 49.3% 49.1%
Cash flow from operations 51.8 100.7 134.8 134.9 Dividend Cover (x) nm nm nm nm
Capex (0.1) (150.0) (5.0) (5.0) Interest Cover (x) 6.5 13.4 10.1 8.2
Disposal/(purchase) (47.3) 0.0 0.0 0.0 Asset Turnover (x) 0.1 0.2 0.2 0.1
Others 0.7 0.0 0.0 0.0 Asset/Debt (x) 2.9 2.3 2.6 2.8
Cash flow from investing (46.7) (150.0) (5.0) (5.0) Debtors Turn (days) 82.2 96.5 133.5 133.4
Debt raised/(repaid) 73.2 193.3 0.0 0.0 Creditors Turn (days) 72.0 67.0 98.2 103.7
Equity raised/(repaid) (63.7) (152.8) 0.0 0.0 Inventory Turn (days) na na na na
Dividends (paid) 0.0 0.0 0.0 0.0 Net Gearing % 69.5 97.3 55.8 26.7
Interest payments 0.0 0.0 0.0 0.0 Debt/ EBITDA (x) 5.0 3.2 3.1 3.1
Others 0.0 0.0 0.0 0.0 Debt/ Market Cap (x) 0.4 0.7 0.7 0.7
Cash flow from financing 9.5 40.5 0.0 0.0
Change in cash 14.7 (8.7) 129.8 129.9
Sources: Company, Maybank IB
21 June 2012 Page 20 of 26
Oil & Gas - FPSO 17 October 2011
Yinson Holdings Rising to the Clouds
Maintain BUY, geared for growth. Yinson has clinched its first FPSO
job via a JV with PetroVietnam Technical Services Corporation (PTSC).
This adds an estimated MYR27m p.a. to Yinson‟s earnings over the
next decade. We do not rule out Yinson eying further PETRONAS and
PetroVietnam contracts, and expanding further in Malaysia. Our sum-
of-parts (SOP) TP of MYR2.54 offers 18% upside.
An emerging floating solutions player. The Yinson-PTSC JV win for
the Lam Son FPSO bare-boat charter project worth USD737.3m
(MYR2.4b) is noteworthy on multiple fronts. Not only is it Yinson‟s
second floating solution project win, it also marks Yinson‟s debut as a
contractor for PETRONAS and an FPSO operator, and endorses its
capabilities in the floating solutions space. It is also a boost to
earnings, offering long term earnings visibility and rewarding IRRs.
Sailing high, riding on the Asian market. We believe that Yinson is
still hungry for a third floating solutions project. Opportunities will arise
primarily from the Malaysian and Vietnamese offshore O&G markets.
With 6 and 4 FPSO projects respectively, Malaysia and Vietnam house
almost half of the 21 upcoming FPSO projects. While Yinson‟s gearing
and the ability to raise financing remains the primary hurdle, we think
that Yinson‟s appetite remains for a third floating solutions contract.
3-year net profit CAGR of 47%, still with upside bias. We expect
18% net profit growth in FY1/13, fuelled by two new AHTS vessels.
Earnings will expand at a stronger 55% and 73% in FY1/14-15
respectively, as contributions from its 49%-owned FSO Bein Dong and
FPSO Lam Son kick in from 2Q13 and 4Q13 respectively. There is still
upside to our forecasts, for we have yet to future contributions from its
40%-owned PTSC Phu My Port.
Good growth at a great price. Yinson trades at 9x FY1/14 PER, just
5x FY1/15 PER and 0.3x PEG, a more than reasonable proposition for
a small-cap, high-growth stock with the bulk of its earnings locked-in for
the next 5-20 years. Our SOP-based TP of MYR2.54 implies a FY1/14-
15 PER of 6-11x.
Yinson Holdings– Summary Earnings Table FYE Jan (MYR m) 2011A 2012A 2013F 2014F 2015F Revenue 640.8 715.8 672.9 685.0 688.6
EBITDA 40.5 52.9 66.0 100.6 117.3
Recurring Net Profit 18.5 26.6 31.3 48.5 84.0
Recurring Basic EPS (cents) 27.1 35.3 15.6 24.2 41.9
EPS growth (%) 133.2% 30.3% (55.7)% 54.8% 73.4%
DPS (cents) 2.1 2.5 2.5 2.5 2.5
PER 7.9 6.1 13.8 8.9 5.1 EV/EBITDA (x) 8.1 7.2 13.8 8.2 6.2
Div Yield (%) 1.0 1.2 1.2 1.2 1.2
P/BV(x) 1.2 1.0 1.5 1.3 1.1 Net Gearing (%) 148.3 140.2 172.5 123.2 73.8
ROE (%) 16.3% 19.0% 14.4% 16.2% 23.3%
ROA (%) 5.9% 6.0% 4.5% 5.5% 9.6%
Earnings revisions (%) - - - - -
Source: Maybank-IB
Buy (unchanged)
Share price: MYR2.15 Target price: MYR2.54 (unchanged)
Wong Chew Hann [email protected] (603) 2297 8688
Chong Ooi Ming [email protected] (603) 2297 8676
Stock Information
Description: Vietnam focused O&G solutions and project manager with 4 core operations: FPS projects, marine vessels, land logistics and port operations.
Ticker: YNS MK Shares Issued (m): 200.4 Market Cap (US$ m): 418.7 3-mth Avg Daily Turnover (US$ m): 0.34
ST Index: 1,594.98 Free float (%): 44.0 Major Shareholders: % Lim Han Weng 33.5
Bah Kim Lian 11.6 Liannex Corp 5.7 Lim Han Joeh 5.2
Key Indicators
Net cash / (debt) (MYR m): (221.6) NTA/shr (MYR): 2.10 Net Gearing (x): 1.4
Historical Chart
0.4
0.9
1.4
1.9
Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12
YNS MK Equity
Performance:
52-week High/Low MYR2.19/MYR0.94
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) 19.4 28.2 76.1 93.2 62.5
Relative (%) 15.3 26.9 67.2 90.9 58.3
21 June 2012 Page 21 of 26
Oil & Gas - FPSO 17 October 2011
INCOME STATEMENT (MYR m) BALANCE SHEET (MYR m)
FY Jan 2012A 2013F 2014F 2015F FY Jan 2012A 2013F 2014F 2015F
Revenue 715.8 672.9 685.0 688.6 Fixed Assets 150.0 508.5 479.3 444.7
EBITDA 52.9 66.0 100.6 117.3 Other LT Assets 46.2 46.1 49.5 76.3
Depreciation & Amortisation (8.9) (15.1) (32.4) (37.7) Cash/ST Investments 30.4 56.4 79.2 109.7
Operating Profit (EBIT) 44.0 50.8 68.2 79.6 Other Current Assets 269.8 270.1 258.2 246.8
Interest (Exp)/Inc (11.0) (14.1) (18.2) (17.2) Total Assets 496.4 881.2 866.2 877.6
Associates 0.0 0.0 3.4 26.8
One-offs 3.4 0.0 0.0 0.0 ST Debt 179.9 178.1 176.3 176.3
Pre-Tax Profit 32.8 36.7 53.4 89.1 Other Current Liabilities 83.3 42.5 41.7 40.9
Tax (6.5) (3.9) (2.1) (2.1) LT Debt 72.0 357.9 299.0 229.1
Minority Interest (0.3) 1.5 2.9 3.0 Other LT Liabilities 3.4 23.5 23.6 23.8
Net Profit 26.6 31.3 48.5 84.0 Minority Interest (0.3) 1.2 4.1 7.1
Recurring Net Profit 26.6 31.3 48.5 84.0 Shareholders' Equity 158.1 278.0 321.5 400.5
Total Liabilities-Capital 496.4 881.2 866.2 877.6
Revenue Growth % 11.7% (6.0)% 1.8% 0.5%
EBITDA Growth (%) 30.5% 24.6% 52.5% 16.6% Share Capital (m) 75.3 200.4 200.4 200.4
EBIT Growth (%) 33.5% 15.5% 34.3% 16.6% Gross Debt/(Cash) 251.9 536.0 475.3 405.4
Net Profit Growth (%) 43.3% 17.8% 54.8% 73.4% Net Debt/(Cash) 221.6 479.5 396.1 295.7
Recurring Net Profit Growth (%) 43.3% 17.8% 54.8% 73.4% Working Capital 37.0 105.9 119.4 139.4
Tax Rate % 20.0% 10.5% 3.8% 2.3%
CASH FLOW (MYR m) RATES & RATIOS
FY Jan 2012A 2013F 2014F 2015F FY Jan 2012A 2013F 2014F 2015F
Profit before taxation 32.8 36.7 53.4 89.1 EBITDA Margin % 7.4% 9.8% 14.7% 17.0%
Depreciation 8.9 15.1 32.4 37.7 Op. Profit Margin % 6.1% 7.6% 10.0% 11.6%
Net interest receipts/(payments) (11.0) (14.1) (18.2) (17.2) Net Profit Margin % 3.7% 4.7% 7.1% 12.2%
Working capital change (53.4) (4.2) 11.1 10.5 ROE % 19.0% 14.4% 16.2% 23.3%
Cash tax paid (6.5) (3.9) (2.1) (2.1) ROA % 6.0% 4.5% 5.5% 9.6%
Others (incl'd exceptional items) 22.7 28.2 33.1 7.7 Net Margin Ex. El % 3.7% 4.7% 7.1% 12.2%
Cash flow from operations (6.6) 57.9 109.6 125.7 Dividend Cover (x) 14.1 6.3 9.7 16.8
Capex (3.3) (338.2) (3.0) (3.0) Interest Cover (x) (4.0) (3.6) (3.7) (4.6)
Disposal/(purchase) 4.1 0.0 0.0 0.0 Asset Turnover (x) 1.4 0.8 0.8 0.8
Others 0.0 (76.5) 0.0 0.0 Asset/Debt (x) 2.0 1.6 1.8 2.2
Cash flow from investing 0.8 (414.8) (3.0) (3.0) Debtors Turn (days) 123.1 135.8 130.3 123.4
Debt raised/(repaid) 22.0 284.0 (60.7) (69.9) Creditors Turn (days) 44.2 52.8 51.0 51.0
Equity raised/(repaid) 11.2 116.8 0.0 0.0 Inventory Turn (days) 0.3 0.3 0.3 0.3
Dividends (paid) (1.4) (3.8) (5.0) (5.0) Net Gearing % 140.2 172.5 123.2 73.8
Interest payments (11.0) (14.1) (18.2) (17.2) Debt/ EBITDA (x) 4.8 8.1 4.7 3.5
Others 11.0 0.0 0.0 0.0 Debt/ Market Cap (x) 0.6 1.3 1.1 1.0
Cash flow from financing 31.8 383.0 (83.9) (92.2)
Change in cash 26.0 26.1 22.7 30.6
Sources: Company, Maybank-IB
21 June 2012 Page 22 of 26
Oil & Gas - FPSO 17 October 2011
RESEARCH OFFICES REGIONAL
P K BASU Regional Head, Research & Economics
(65) 6432 1821 [email protected]
WONG Chew Hann, CA Acting Regional Head of Institutional Research
(603) 2297 8686 [email protected]
THAM Mun Hon Regional Strategist
(852) 2268 0630 [email protected]
ONG Seng Yeow Regional Products & Planning (852) 2268 0644 [email protected]
ECONOMICS Suhaimi ILIAS Chief Economist
Singapore | Malaysia (603) 2297 8682 [email protected]
Luz LORENZO Economist
Philippines | Indonesia (63) 2 849 8836 [email protected]
MALAYSIA WONG Chew Hann, CA Head of Research
(603) 2297 8686 [email protected]
Strategy Construction & Infrastructure Desmond CH’NG, ACA
(603) 2297 8680 [email protected] Banking - Regional
LIAW Thong Jung
(603) 2297 8688 [email protected] Oil & Gas Automotive
Shipping ONG Chee Ting
(603) 2297 8678 [email protected] Plantations Mohshin AZIZ
(603) 2297 8692 [email protected] Aviation Petrochem
Power YIN Shao Yang, CPA (603) 2297 8916 [email protected] Gaming – Regional
Media Power
WONG Wei Sum, CFA (603) 2297 8679 [email protected] Property & REITs
LEE Yen Ling (603) 2297 8691 [email protected]
Building Materials Manufacturing Technology
LEE Cheng Hooi Head of Retail
[email protected] Technicals
HONG KONG / CHINA Edward FUNG Head of Research
(852) 2268 0632 [email protected]
Construction Ivan CHEUNG
(852) 2268 0634 [email protected] Property Industrial
Ivan LI (852) 2268 0641 [email protected] Banking & Finance
Jacqueline KO (852) 2268 0633 [email protected] Consumer Staples
Andy POON (852) 2268 0645 [email protected] Telecom & equipment
Samantha KWONG (852) 2268 0640 [email protected] Consumer Discretionaries
Alex YEUNG (852) 2268 0636 [email protected]
Industrial Catherine CHAN (852) 2268 0631 [email protected]
Cement Anita HWANG, CFA | Jacky WONG, CFA [email protected] | [email protected]
(852) 2268 0142 | (852) 2268 0107 Special Situations Quants
INDIA Jigar SHAH Head of Research
(91) 22 6623 2601 [email protected] Oil & Gas
Automobile Cement Anubhav GUPTA
(91) 22 6623 2605 [email protected] Metal & Mining Capital goods
Property Haripreet BATRA
(91) 226623 2606 [email protected] Software Media
Ganesh RAM (91) 226623 2607 [email protected] Telecom
Contractor Darpin SHAH (91) 226623 2610 [email protected]
Banking & Financial Services Gagan KWATRA (91 )226623 2612 [email protected]
Small Cap
SINGAPORE Stephanie WONG Head of Research
(65) 6432 1451 [email protected]
Strategy Small & Mid Caps Gregory YAP
(65) 6432 1450 [email protected] Technology & Manufacturing Telcos - Regional
Wilson LIEW (65) 6432 1454 [email protected] Hotel & Resort
Property & Construction James KOH
(65) 6432 1431 [email protected] Logistics Resources
Consumer Small & Mid Caps YEAK Chee Keong, CFA
(65) 6433 5730 [email protected] Healthcare Offshore & Marine
Alison FOK (65) 6433 5745 [email protected] Services
S-chips Bernard CHIN (65) 6433 5726 [email protected]
Transport (Land, Shipping & Aviation) ONG Kian Lin
(65) 6432 1470 [email protected] REITs / Property WeiBin
(65) 6432 1455 [email protected] S-chips Small & Mid Caps
INDONESIA Katarina SETIAWAN Head of Research
(62) 21 2557 1125 [email protected] Consumer
Strategy Telcos Lucky ARIESANDI, CFA
(62) 21 2557 1127 [email protected] Base metals Coal
Oil & Gas Rahmi MARINA (62) 21 2557 1128 [email protected]
Banking Multifinance Pandu ANUGRAH
(62) 21 2557 1137 [email protected] Auto
Heavy equipment Plantation Toll road
Adi N. WICAKSONO (62) 21 2557 1130 [email protected] Generalist
Anthony YUNUS (62) 21 2557 1134 [email protected] Cement
Infrastructure Property Arwani PRANADJAYA
(62) 21 2557 1129 [email protected] Technicals
PHILIPPINES Luz LORENZO Head of Research
+63 2 849 8836 [email protected] Strategy Laura DY-LIACCO
(63) 2 849 8840 [email protected] Utilities
Conglomerates Telcos Lovell SARREAL
(63) 2 849 8841 [email protected] Consumer Media
Cement Mining Kenneth NERECINA
(63) 2 849 8839 [email protected] Conglomerates Property
Ports/ Logistics Katherine TAN (63) 2 849 8843 [email protected]
Banks Construction
Ramon ADVIENTO (63) 2 849 8842 [email protected]
THAILAND Mayuree CHOWVIKRAN Head of Research
(66) 2658 6300 ext 1440 [email protected] Strategy
Maria BRENDA SANCHEZ LAPIZ Co-Head of Research
Dir (66) 2257 0250 | (66) 2658 6300 ext 1399
Andrew STOTZ Strategist
(66) 2658 6300 ext 5091 [email protected]
Suttatip PEERASUB
(66) 2658 6300 ext 1430 [email protected] Media Commerce
Sutthichai KUMWORACHAI (66) 2658 6300 ext 1400 [email protected] Energy
Petrochem Termporn TANTIVIVAT (66) 2658 6300 ext 1520 [email protected]
Property Woraphon WIROONSRI (66) 2658 6300 ext 1560 [email protected]
Banking & Finance Jaroonpan WATTANAWONG
(66) 2658 6300 ext 1404 [email protected] Transportation Small cap.
Suchot THIRAWANNARAT (66) 2658 6300 ext 1550 [email protected] Automotive
Construction Materials Soft commodity
VIETNAM Michael KOKALARI, CFA Head of Research
+84 838 38 66 47 [email protected]
Strategy Nguyen Thi Ngan Tuyen +84 844 55 58 88 x 8081 [email protected]
Food and Beverage Oil and Gas Ngo Bich Van
+84 844 55 58 88 x 8084 [email protected] Banking Nguyen Quang Duy
+84 844 55 58 88 x 8082 [email protected] Rubber Dang Thi Kim Thoa
+84 844 55 58 88 x 8083 [email protected] Consumer Nguyen Trung Hoa
+84 844 55 58 88 x 8088 [email protected] Steel
Sugar Macro
21 June 2012 Page 23 of 26
Oil & Gas - FPSO 17 October 2011
Mining
21 June 2012 Page 24 of 26
Oil & Gas - FPSO 17 October 2011
APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES
DISCLAIMERS
This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each security‟s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuat ions apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdiction‟s stock exchange in the equity analysis. Accordingly, investors‟ returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, “MKE”) and consequently no representation is made as to the accuracy or completeness of this report by MKE and it should not be relied upon as such. Accordingly, MKE and its officers, directors, associates, connected parties and/or employees (collectively, “Representatives”) shall not be liable for any direct, indirect or consequential losses or damages that may arise from the use or reliance of this report. Any information, opinions or recommendations contained herein are subject to change at any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”, “believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions made and information current ly available to us and are subject to certain risks and uncertainties that could cause the actual results to differ materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forward-looking statements. MKE expressly disclaims any obligation to update or revise any such forward looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrenc e of unanticipated events.
MKE and its officers, directors and employees, including persons involved in the preparation or issuance of this report, may, to the extent permitted by law, from time to time participate or invest in financing transactions with the issuer(s) of the securities mentioned in this report, perform services for or solicit business from such issuers, and/or have a position or holding, or other material interest, or effect transactions, in such securities or options thereon, or other investments related thereto. In addition, it may make markets in the securities mentioned in the material presented in this report. MKE may, to the extent permitted by law, act upon or use the information presented herein, or the research or analysis on which they are based, before the material is published. One or more directors, officers and/or employees of MKE may be a director of the issuers of the securities mentioned in this report.
This report is prepared for the use of MKE‟s clients and may not be reproduced, altered in any way, transmitted to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of MKE and MKE and its Representatives accepts no liability whatsoever for the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation. This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.
Malaysia
Opinions or recommendations contained herein are in the form of technical ratings and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.
Singapore
This report has been produced as of the date hereof and the information herein may be subject to change. Maybank Kim Eng Research Pte. Ltd. (“Maybank KERPL”) in Singapore has no obligation to update such information for any recipient. For distribution in Singapore, recipients of this report are to contact Maybank KERPL in Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of th is report is not an accredited investor, expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), Maybank KERPL shall be legally liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
Thailand
The disclosure of the survey result of the Thai Institute of Directors Association (“IOD”) regarding corporate governance is made pursuant to the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed on the Stock Exchange of Thailand and the market for Alternative Investment disclosed to the public and able to be accessed by a general public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside information. The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey may be changed after that date. Maybank Kim Eng Securities (Thailand) Public Company Limited (“MBKET”) does not confirm nor certify the accuracy of such survey result.
Except as specifically permitted, no part of this presentation may be reproduced or distributed in any manner without the pri or written permission of MBKET. MBKET accepts no liability whatsoever for the actions of third parties in this respect.
US
This research report prepared by MKE is distributed in the United States (“US”) to Major US Institutional Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Maybank Kim Eng Securities USA Inc (“Maybank KESUSA”), a broker-dealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended). All responsibility for the distribution of this report by Maybank KESUSA in the US shall be borne by Maybank KESUSA. All resulting transactions by a US person or entity should be effected through a registered broker-dealer in the US. This report is not directed at you if MKE is prohibited or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it that Maybank KESUSA is permitted to provide research material concerning investment s to you under relevant legislation and regulations.
UK
This document is being distributed by Maybank Kim Eng Securities (London) Ltd (“Maybank KESL”) which is authorized and regulated, by the Financial Services Authority and is for Informational Purposes only. This document is not intended for distribution to anyone defined as a Retail Client under the Financial Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own independent tax advisers.
21 June 2012 Page 25 of 26
Oil & Gas - FPSO 17 October 2011
DISCLOSURES
Legal Entities Disclosures
Malaysia: This report is issued and distributed in Malaysia by Maybank Investment Bank Berhad (15938-H) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets and Services License issued by the Securities Commission in Malaysia. Singapore: This material is issued and distributed in Singapore by Maybank KERPL (Co. Reg No 197201256N) which is regulated by the Monetary Authority of Singapore. Indonesia: PT Kim Eng Securities (“PTKES”) (Reg. No. KEP-251/PM/1992) is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Thailand: MBKET (Reg. No.0107545000314) is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission.Philippines:MATRKES (Reg. No.01-2004-00019) is a member of the Philippines Stock Exchange and is regulated by the Securities and Exchange Commission. Vietnam: Kim Eng Vietnam Securities Company (“KEVS”) (License Number: 71/UBCK-GP) is licensed under the StateSecuritiesCommission of Vietnam.Hong Kong: KESHK (Central Entity No AAD284) is regulated by the Securities and Futures Commission. India: Kim Eng Securities India Private Limited (“KESI”) is a participant of the National Stock Exchange of India Lim ited (Reg No: INF/INB 231452435) and the Bombay Stock Exchange (Reg. No. INF/INB 011452431) and is regulated by Securities and Exchange Board of India. KESI is also registered with SEBI as Category 1 Merchant Banker (Reg. No. INM 000011708) US: Maybank KESUSA is a member of/ and is authorized and regulated by the FINRA – Broker ID 27861. UK: Maybank KESL (Reg No 2377538) is authorized and regulated by the Financial Services Authority.
Disclosure of Interest
Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies.
Singapore: As of 21 June 2012, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report.
Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report.
Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
As of 21 June 2012, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report.
MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 months, significant advice or investment services in relation to the investment concerned or a related investment.
OTHERS
Analyst Certification of Independence
The views expressed in this research report accurately reflect the analyst‟s personal views about any and all of the subject securities or issuers; and no part of the research analyst‟s compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
Reminder
Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase.
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.
Definition of Ratings
Maybank Kim Eng Research uses the following rating system:
BUY Total return is expected to be above 15% in the next 12 months
HOLD Total return is expected to be between -15% to +15% in the next 12 months
SELL Total return is expected to be below -15% in the next 12 months
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only
applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings
as we do not actively follow developments in these companies.
Some common terms abbreviated in this report (where they appear):
Adex = Advertising Expenditure FCF = Free Cashflow PE = Price Earnings
BV = Book Value FV = Fair Value PEG = PE Ratio To Growth
CAGR = Compounded Annual Growth Rate FY = Financial Year PER = PE Ratio
Capex = Capital Expenditure FYE = Financial Year End QoQ = Quarter-On-Quarter
CY = Calendar Year MoM = Month-On-Month ROA = Return On Asset
DCF = Discounted Cashflow NAV = Net Asset Value ROE = Return On Equity DPS = Dividend Per Share
NTA = Net Tangible Asset ROSF = Return On Shareholders’ Funds
EBIT = Earnings Before Interest And Tax P = Price WACC = Weighted Average Cost Of Capital
EBITDA = EBIT, Depreciation And Amortisation P.A. = Per Annum YoY = Year-On-Year
EPS = Earnings Per Share PAT = Profit After Tax YTD = Year-To-Date
EV = Enterprise Value PBT = Profit Before Tax
21 June 2012 Page 26 of 26
Oil & Gas - FPSO 17 October 2011
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