[%txNF%] 
Research by Kenanga
Outperform - TP RM0.30

"Possessing the Dragon’s Resilience"

VELESTO's 1HFY24 results were deemed within our expectations but came in below consensus. We anticipate weaker earnings in 2HFY24 as three rigs are scheduled for maintenance. We think that while Petronas exploration activities might ease in Sarawak, there is no demand shortage from the region although slightly lower utilisation on shorter charters may ensue, leading to our FY25 earnings cut of 13%. The same magnitude of cut in TP, to 30 sen, is applied, while maintaining our OUTPERFORM rating.

Analyst:
Lim Sin Kiat, CFA 
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$KLSE-VELESTO 
Research by Kenanga
Outperform - TP RM0.30

"Possessing the Dragon’s Resilience"

VELESTO's 1HFY24 results were deemed within our expectations but came in below consensus. We anticipate weaker earnings in 2HFY24 as three rigs are scheduled for maintenance. We think that while Petronas exploration activities might ease in Sarawak, there is no demand shortage from the region although slightly lower utilisation on shorter charters may ensue, leading to our FY25 earnings cut of 13%. The same magnitude of cut in TP, to 30 sen, is applied, while maintaining our OUTPERFORM rating.

Analyst:
Lim Sin Kiat, CFA 
limsk@kenanga.com.my