Intel heads into its April 23 earnings with rising investor expectations , but the key question remains whether AI-driven CPU demand can offset ongoing margin weakness . Revenue Stable, But Margins Under Pressure Intel is expected to deliver Q1 revenue around US$12.4 billion , slightly above the midpoint of its guidance range. However, the real concern lies in profitability: Gross margin guided at 34.5% , down from 39.2% a year ago EPS near breakeven (~US$0.00) vs US$0.13 last year This highlights continued pressure from costs, utilisation, and product mix , despite improving demand signals. AI CPUs: A Key Growth Driver Intel’s near-term bullish case centers on AI-related CPU demand , particularly its Xeon processors. A key development is its partnership with Alphabet , which reinforces: Intel’s role in AI data centre infrastructure Growing demand for AI inference and general-purpose computing Investors will watch c...
Maintain Neutral with unchanged target price (TP) of RM1.21
Following the anticipated termination or cancellation of the Memorandum of Agreement (MoA) for one unit 500-men accommodation work barge SK316 in March this year, Perdana has announced the cancellation of the second MoA with Nam Cheong International Limited (NCIL), for another unit of 500-men accommodation work barge SK317. The cancellation is pertaining to NCIL not having fulfilled the condition of delivering the Vessel in accordance with the terms and conditions of the MoA. The Group is therefore seeking the immediate return of the deposit paid of USD8.4m (RM37.0m), as advised by the legal counsel. The total consideration of the SK317 is USD84.0m. We continue to rate Perdana with a Neutral call with an unchanged TP of RM1.21 upon the removal of suspension, based on our DCF approach using a 10.9% WACC.
- Details. The 2 units of 500-men accommodation work barges are identified as Vessel Hull No. SK316 and SK317 from Nam Cheong International Limited. The Group via its wholly owned subsidiary, Petra Offshore Limited (POL) has on 1 December 2016 sent notification to NCIL of the cancellation of the MoA as NCIL has not fulfilled the condition of delivery of SK317 in accordance with the terms and conditions of the MoA. Accordingly, POL has sought for the immediate return of the deposit paid of USD8.4m (RM37.0m), as advised by the legal counsel.
- Impact. The cancellation of the MoA does not have any reasonably foreseeable material and adverse financial and operational impact on POL, except for the refund of the said deposit which will improve its cashflow. This will also aid in the effective management of Perdana’s portfolio for the longer-term, to ensure a higher fleet utilization and improved efficiencies such as streamlining its operations, while reducing its vessel utilization breakeven levels to a c.50% level.
Source: PublicInvest Research - 02 December 2016
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