Keyfield shares touch new high, nearly triple since April listing

KUALA LUMPUR (July 5): Shares of Keyfield International Bhd (KL:KEYFIELD) made another new high since the oil-and-gas (O&G) service company’s debut on the Main Market in April, following new contract wins.

Keyfield rose as much as 3.5% or nine sen to RM2.69 on Friday morning. At 9.30am, the stock was trading at RM2.68, valuing the company at RM2.14 billion on Bursa Malaysia. Trading volume totalled 449,000 shares so far. The stock has nearly tripled from its initial public offering (IPO) price of 90 sen apiece.

Kenanga Investment Bank, the sole research house covering the Keyfield, said the daily charter rate for one accommodation workboat was higher than expected, though the rate for one anchor handling tug supply vessel was within expectation. All in all, the contracts are worth RM40 million.

“We are positive on the latest development,” said Kenanga and maintained the stock on “outperform”, equivalent to “buy” call. The house raised its target price (TP) to RM3.00 from RM2.85, after lifting its earnings forecasts.

Shares of Keyfield have been surging, tracking strong gains of peers in the energy sector, on the back of strong oil prices. Bursa Malaysia Energy Index, which tracks 22 stocks in the sector, have climbed more than 20% since the year began.

Oil prices have remained robust amid global geopolitical concerns. Brent, the global benchmark for crude oil, has risen 13% so far this year to about US$87 per barrel on Friday.

Keyfield’s second- and third-quarter results are expected to be strong, with all of its vessels operating near full capacity post the monsoon season, said Kenanga. The majority of its accommodation workboat are currently engaged in medium-term charters of six- to nine months, it noted.

If demand for accommodation workboat remains robust, daily charter rates could be higher for 2025, said Kenanga. Given the tight supply of offshore support vessels in Malaysia on robust activities, daily charter rates are expected to continue rising in coming months, the house said.

Kenanga is raising its net profit forecasts for 2024 by 6% and for 2025 by 5%, to account for the higher average daily charter rates. Following the revisions, the company is expected to make a net profit of RM151.6 million this year and RM226 million for next year.

Broadly, “we like Keyfield due to its presence in the booming subsector on tight supply, its relatively young fleet age of eight years and DP2-rated vessels which are preferred by clients, and a strong war chest by virtue of a low net gearing,” Kenanga added.

Read also:

Keyfield secures two contracts totalling RM40m to supply accommodation workboats

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