to "market perform" following the recent increase in share price and weaker outlook moving forward.The research house expects the group to post sequentially weaker earnings in 4QFY20 given the monsoon season while Petronas has guided for flattish demand for offshore maintenance and hook-up and commissioning in 2021 as compared to 2020 levels.
"Since our upgraded 'outperform' call in Nov 2020, the stock had already managed returns of +14%.
"As such, we feel the share to be fairly valued at the moment, especially considering the flattish activity outlook as guided by Petronas.
"We trimmed our FY21E earnings by 11% after lowering our work order recognition assumptions," it said.
Kenanga also lowered the target price to RM1.20 from RM1.35 previously as it lowered its ascribed valuations from 0.9x price-book vlue to 0.8x.
Meanwhile, the research house is positive on the contract awarded by Mubadala Petroleum for the provision of Pan Malaysia maintenance, construction and moficiation, although it expects the contract values to be smallish.
"While no contract values were disclosed in the announcement, as the actual contract values will be dependent on work orders issued by the client, we
guesstimate the total value of the contract to be rather smallish at roughly
"In context, this is