Barefoot Investor: Key Reports today ( 07th July, 2011)

Bumi Armada (Subscribe/Buy, IPO price: RM3.15, FV: RM3.65). Bumi Armada Berhad (BAB) is an established provider of 1-stop vessel solutions via its FPSO and OSVs, as well as T&I, OFS and FMS services. BAB has a presence in more than 10 countries in Asia, Africa and Latin America. The group is supported by RM5.8bn-strong orderbook, which will keep it busy for the next 2-3 years. We initiate coverage with a Subscribe/Buy recommendation and fair value of RM3.65, based on sum-of-parts valuation and equivalent to a PER of 18x FY12 EPS.

TRC SYNERGY (BUY, FV: RM2.40, Last Close: RM1.76).OSK Research initiate coverage on TRC with a BUY rating and RM2.40 FV, giving rise to a 36% upside. TRC’s earnings are at an inflection point and the RM950m Kelana A extension contract will be its key earnings driver. Given its experience, we think it has a good chance with the LRT B package and MRT contracts. Potential jobs could also come from road projects in Sarawak, where it has a strong foothold. TRC boasts a healthy net cash position of RM182m, which makes up 53% of its market cap.


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