Equity Analysis /
Malaysia

MY : Velesto Energy Berhad - FY21F utilisation picking up

    Raymond Yap
    Raymond Yap

    Head of Regional Transport

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    CGS-CIMB
    7 April 2021
    Published byCGS-CIMB

    Velesto announced its fourth new jack-up (JU) drilling contract this year, raising FY21F utilisation to c.42%, albeit still below our 60% assumption. We revise up our daily charter rate (DCR) assumptions given the better-than-expected rates secured to date, and reduce our Ke from 15.5% to 15.1%. Our DCF-based TP of 17 sen remains unchanged due to an upward revision of capex to RM100m for FY21F; hence we reiterate our Hold call.