KUALA LUMPUR: Affin Hwang Capital Research has maintained its “hold” rating on Sapura Energy Bhd at RM1.47 with a lower target price of RM1.35 (from RM1.70).
The lower target price, said the research firm, was based on the current valuation reflected by the fundamentals of the company.
Affin Hwang said following its recent discussion with Sapura Energy, it gathered that business is expected to remain challenging in FY18, timing of order book replenishment is rather uncertain, drilling rig utilisation rates are expected to recover only from FY19E onwards with daily charter rates (DCR) remaining subdued, and Brazil operation remains robust with high vessel utilisation.
“Ahead of the upcoming 2QFY18 results this month, we cut our FY18-20E earnings forecasts by 34 per cent to 64 per cent.
“We maintain a “hold” rating but lower our target price to RM1.35,” it said in a note today.