BIMB SECURITIES RESEARCH

MARKET INSIGHT
PP16795/03/2013(031743)

Tuesday, 8 May, 2012

Company Update

Bumi Armada
Keeping the Momentum
Stock Data Bloomberg Ticker Market Cap Issued shares 52-week range (H) 52-week range (L) 3-mth avg daily volume Free Float Shariah Compliant BAB MK 11,713.8 Equity 2,928.5 4.53 3.03 4.3 27.5% Y Altman Z-score YTD price chg YTD KLCI chg Beta Major Shareholders Objektif Bersatu SB Ombak Damai SB EPF n.a -2.4% 3.5% 0.9 42.41% 11.33% 6.95%

Buy
Price: RM4.00 Target Price: RM4.65 Bumi Armadas international business portfolio continues Price:
to perform strongly this year. Yesterday it announced a USD65m 5+5 charter and operation contract from a Mexican company for its accommodation workboat, Armada Firman 3. We made no changes to our forecast and target price of RM4.65 but upgraded our call from Neutral to Buy as we view the recent share price retracement offers a good accumulation opportunity for investors.
The contract. The 5 + 5 year contract involves the provision of accommodation and offshore service to support the clients oil field activities in the Mexican waters. The vessel which comes with DP2 capability and equipped with a 40 tonne single wire line deck crane for maintenance and installation activities is priced at an estimated daily charter rate of USD35,600. Contract commenced immediately. New orders driven by overseas demand. YTD Bumi Armada has added about RM1.1bn worth of long term contracts into its book of which RM465m is from its OSV segment and RM600m from T&I segment, these represent about 10% of orderbook growth from the beginning of the year. Interestingly, all of these new contracts were from overseas, a strong testament of the Groups international competitive strength and we are also excited to see the Groups success in positioning itself in the main markets of global oil and gas industry. We remain sanguine on the Groups prospect in adding new contracts for the rest of the year and expect to see sizeable contract procurement from domestic market as well. Forecast unchanged. Current orderbook is estimated at RM11bn. We made no change to our forecast arising from this new contract as it will be stretched over a 5 year period. View & Valuation. We view market has over-reacted with the recent shares disposal by the Groups major shareholders. With share priced retraced almost 11% from its record high in less than 3 weeks, we see the counter is ripe for a rebound thus offering a good entry point for investors to accumulate. Upgrade our call from Neutral to Buy with an unchanged target price of RM4.65 based on 23x PER over FY12 EPS

Share Performance (%) Absolute vs. KLCI Financial Highlights FYE 31 Dec Turnover (RMm) EBIT Pretax profit Core Net Profit EBIT margin Pretax margin Effective tax rate ROE ROA Net Gearing (x) Core EPS (sen) Core EPS growth PER (%) (x) DPS (sen) Div. Yield (%) NTA/share (RM) Growth ratios Turnover EBIT Pretax profit Core Net profit Share Price Chart

1mth -10.3% -9.5%

3mth 0.8% -2.2%

12mth n.a n.a

2009 732.1 334.7 283.9 277.4 45.7% 38.8% -2.3% 41.4% 7.2% 3.54 9.5 84.9% 42.2 0.0 0.0% 0.23

2010 1,241.4 465.7 383.3 350.8 37.5% 30.9% -8.5% 40.1% 7.3% 3.59 12.0 26.4% 33.4 0.0 0.0% 0.30

2011 1,543.9 518.3 435.9 359.7 33.6% 28.2% -16.2% 19.2% 5.2% 0.50 12.3 2.5% 32.6 2.5 0.6% 1.21

2012E 2,495.5 825.1 732.1 593.0 33.1% 29.3% -19.0% 25.3% 6.7% 0.78 20.2 64.9% 19.8 4.0 1.0% 1.39

2013E 3,081.4 1,022.5 899.4 719.5 33.2% 29.2% -20.0% 24.6% 6.8% 0.65 24.6 21.3% 16.3 4.9 1.2% 1.69

40.8% 70.4% 75.4% 84.9%

69.6% 39.1% 35.0% 26.4%

24.4% 11.3% 13.7% 2.5%

61.6% 59.2% 68.0% 64.9%

23.5% 23.9% 22.8% 21.3%

Chiong Tong Chai chiongtc@bimbsec.com.my 03-26918887 ext 175

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8 May 2012
DEFINITION OF RATINGS BIMB Securities uses the following rating system:

Company Update: Bumi Armada

STOCK RECOMMENDATION BUY Total return (price appreciation plus dividend yield) is expected to exceed 10% in the next 12 months. TRADING BUY Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain. NEUTRAL Share price may fall within the range of +/- 10% over the next 12 months TAKE PROFIT Target price has been attained. Fundamentals remain intact. Look to accumulate at lower levels. TRADING SELL Share price may fall by more than 15% in the next 3 months. SELL Share price may fall by more than 10% over the next 12 months. NOT RATED Stock is not within regular research coverage. SECTOR RECOMMENDATION OVERWEIGHT The Industry as defined by the analysts coverage universe, is expected to outperform the relevant primary market index over the next 12 months NEUTRAL The Industry as defined by the analysts coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months UNDERWEIGHT The Industry as defined by the analysts coverage universe, is expected to underperform the relevant primary market index over 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. Disclaimer The investments discussed or recommended in this report not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of BIMB securities Sdn Bhd may from time to time have a position in or either the securities mentioned herein. Members of the BIMB Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgements as of this and are subject to change without notice. BIMB Securities Sdn Bhd accepts no liability for any direct, indirect or consequential loss arising from use of this report.

Published by

BIMB SECURITIES SDN BHD (290163-X) A Participating Organisation of Bursa Malaysia Securities Berhad Level 32, Menara Multi Purpose, Capital Square, No. 8 Jalan Munshi Abdullah, 50100 Kuala Lumpur Tel: 03-2691 8887, Fax: 03-2691 1262 http://www.bimbsec.com.my

Kenny Yee Head of Research

www.bimbsec.com.my

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