Petra Energy Bhd
(Aug 10, RM1.17)
Maintain neutral with an unchanged target price of RM1.20: Petra Energy Bhd has entered into a two-year memorandum of understanding (MoU) with Pekat Teknologi Sdn Bhd to form a strategic partnership which involves combining the expertise and resources of both parties to pursue opportunities in relation to design, procurement, installation, commission and operation, and own solar photovoltaic (PV) systems. 

The MoU, which was effective on Tuesday and will expire on Aug 8, 2018 with an extension option, serves only as a basis to bid for potential projects and thus does not have any current contract value.

We understand that the group has been looking for opportunities to diversify its core activities to ensure its business model has an income stream that is not directly affected by oil price fluctuations, which have been volatile. 

We do believe Petra Energy will leverage its project execution and delivery capabilities as a partner for this MoU as the new business diversification is still energy-related. 

No contract value is stated as this MoU serves as an intention of the parties to cooperate and collaborate on an exclusive basis to bid for potential projects. 

Pekat is the distributor of Sungrow, the world’s largest PV inverters and energy storage equipment for residential, commercial and utility-scale PV power plant systems.

Pekat is renowned internationally as a competent solution provider specialising in the design, supply, distribution and installation of lightning protection systems, earthing systems, surge protection systems and PV renewal energy technology. 

Performance for 2016 will be supported by its RM1.6 billion order book comprising engineering, procurement, construction and commissioning jobs for the Semarang enhanced oil recovery contributions, which will offset the loss of work orders from the Pan Malaysia Integrated Offshore contract.

Activities for topside major maintenance service contracts remain, with four workboats and one anchor handling tug supply employed for Petronas Carigali Sdn Bhd’s works. 

The KBM Cluster risk service contract will see its contributions largely offsetting any shortfalls the group experiences from its core activities. — PublicInvest Research, Aug 10