Bullish PublicInvest Research gives vessel owner Keyfield RM1.19 premium over IPO price

MAIN Market-bound Keyfield International Bhd has received good rating from PublicInvest Research which derived a fair value of RM2.09 for the owner of 11 Malaysian-flagged vessels over its initial public offering (IPO) price of 90 sen.

Slated for listing on April 22 (Monday), Keyfield is expected to raise RM188.1 mil from the issuance of 209.0 million new shares with 53.2% and 32.7% of the proceeds are meant for settlement of balance purchase consideration for a barge and a platform supply vessel (PSV) as well as redemption of preference share respectively.

In PublicInvest Research’s views, Keyfield’s competitive strengths include:

  • Its position as a PETRONAS-licensed, Malaysian-owned and flagged vessels operator with letter of awards (LOAs) for umbrella contracts;
  • Specialisation in offshore accommodation;
  • In possession of a fleet of vessels with different accommodation capacities and features;
  • A relatively young and well-equipped accommodation vessels;
  • Employment of crew members on a contractual basis;
  • Access to a network of vessel owners for scalability of operations; and
  • An experienced and dedicated ma nagement team.

Keyfield through its subsidiaries is primarily engaged in chartering both its own as well as third-party accommodation vessels while providing various onboard services including accommodation, catering, housekeeping, laundry and medical support.

Source: PublicInvest Research

As of end-February 2024, the group owns 11 accommodation vessels of which eight are accommodation workboats (AWBs), two are smaller accommodation vessels and one is an accommodation work barge.

“The group primarily charters accommodation vessels for the upstream oil & gas (O&G) industry, serving customers such as PETRONAS Carigali Sdn Bhd (PCSB), petroleum arrangement contractors (PACs), O&G contractors as well as offshore support vessel owners,” PublicInvest Research pointed out in an IPO note.

“Key drivers of its business may include (i) long-term growth in number of offshore O&G platforms; (ii) constant demand for younger and advanced AWBs; and (iii) beneficial governmental policies.”

On the contrary, the key downside risks include (i) susceptibility to inherent risks of the upstream O&G industry (ii) competition; (iii) dependency on the PETRONAS licence and the Umbrella Contract with PCSB; and (iv) dependency on PCSB. – April 3, 2024

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