KUALA LUMPUR: Keyfield International Bhd is poised to chart growth following its initial public offering driven by fleet expansion, expansion of service offerings, and continuous enhancement of its own vessels' capabilities.
Public Investment Bank Bhd (PublicInvest) said in a note that Keyfield aims to strengthen its market position by expanding its fleet.
Keyfield also plans to broaden its service offerings to Petroliam Nasional Bhd's unit Petronas Carigali Sdn Bhd and petroleum arrangement contractors (PACs), while continuously enhancing its vessels' capabilities to align with industry trends and sustainability goals.
"We derive a fair value of RM2.09 based on a 15 times price-to-earnings multiple to its financial year 2024 earnings per share forecast of 13.9sen. The IPO is expected to raise RM188.1 million from the issuance of 209.0 million new shares.
"A total of 53.2 per cent and 32.7 per cent of the proceeds are meant for settlement of balance purchase consideration for a barge and a platform supply vessel as well as redemption of preference share respectively," it said.
Keyfield's competitive strengths include Petronas licensed, Malaysian-owned and flagged vessels operator with letter of awards for umbrella contracts, specialisation in offshore accommodation and in possession of a fleet of vessels with different
Its growth, however, is susceptible to inherent risks of the upstream oil and gas industry, competition and dependency on the Petronas licence and the umbrella contract with Petronas Carigali as well as dependency on the latter.
Without the umbrella contract, PublicInvest said Keyfield's revenue generation from Petyronas Carigali would come to a halt.
Similarly, lacking the Petronas licence would preclude the company from being invited to bid for projects by O&G contractors and from becoming a panel contractor with Petronas Carigali and PACs, thus eliminating revenue streams from these sources.
Petronas Carigali is Keyfield's single largest customer for FY20, FY21, FY22 and 9MFY23, contributing between 27.9 per cent to 57.7 per cent of its revenue.
"The loss of Petronas Carigali will have a material adverse impact on its business, financial condition, operations and prospects if the group is not able to secure replacement chartering contracts from other customers to cushion such impact in the respective year."
Keyfield is set to debut on Bursa Malaysia's Main Market on April 22.