Kris Energy

Kris Energy: UOB Kay Hian initaites coverage with Buy call and TP $1.18. The house notes that since its establishment as an independent exploration & production (E&P) company in 2009, Kris has rapidly expanded its asset base with interests in 19 licences across Asia and is realising the value from its assets via development over the next 12-15 months. The stock offers a sweet spot to investors at current levels and is an attractive M&A target at current prices. Estimate that Kris could turn profitable in 2015F onwards, backed by a strong revenue growth of 269.8% as it brings its two abovementioned oilfields into production. It is unlikely for the company to be profitable in 2014F as its earnings profile in 2H14 should be similar to 1H14, seeing as there are no oilfields being brought into production for the year