Mermaid

Mermaid: Maybank-KE initiates coverage with Buy call and $0.61 TP, implying 20% upside. Note that the group’s orderbook of US$650m practically guarantees EPS growth of 75% in FY9/14E. But the larger investment case is its evolvement into an integrated oilfield services player a la Malaysia’s SapuraKencana, which the market has yet to price in. With a new and powerful board of directors, comprising the Mahagitsiri family, which is politically well-connected in Thailand, as well as the former chairman of PTTEP, there are many fresh opportunities for the company. Mermaid is in a sweet spot to scale up its business as offshore oil and gas spending picks up pace. With US$105m in its coffers, it intends to invest in two new tender rigs which should drive 21% EPS growth in FY9/16E.