Investment Highlights

We maintain BUY on Keyfield. The Group has secured two vessel charter contracts. Notably, this includes a AHTS (Anchor Handling Tug Supply) charter to United Arab Emirates (UAE). We see this as a positive as it highlights the company ability to diversify its portfolio. Both contracts’ average daily charter rate (DCR) is broadly in line with our assumptions, hence we maintain our forecast. Our target price (TP) of RM3.25/share is based on CY26 PE of 10x, at par to the local OGSE average. The Group currently trades at a compelling 1-yr forward PE of 7.3x.

• Two new contracts in the bag. The group announced two contract wins: (a) an AHTS charter for an offshore marine service provider in the UAE which is expected to commence first week of April 2025 for a duration of 720 days, with an extension up to 180 days; and (b) a DP2 AWB charter for a local diving and ROV provider which will begin mid-February, for 150 days, with an extension up to 120 days. The combined value of both contracts totals to RM59.6mil. We believe these contracts will command DCRs within our expectations. For reference, our forecasts assume a rate of RM35-40k/day for AHTS and RM110-130k/day for DP2 AWB vessel. With supply remaining tight, we expect DCR to remain stable. Thus, we maintain our forecast.
• Strategic entry into the Middle East. Though the new contracts are within our expectations, we see the former as management making good on its diversification strategy earlier than expected amidst the gradual decline in OSV requirements in Malaysia over the next 3-years (2025-2027), according to the recently released Petronas Activity Outlook. Until now, Keyfield has primarily operated in Malaysia and the common operations area with Thailand. We understand management opted for the UAE over Brazil and West Africa due to lower operational risks and alignment with the country's allowed vessel specifications. We believe the group is capitalising on the regions' stronger capex spending prospects. According to Rystad, Middle East's offshore sector is set to lead global upstream spending this year. This is driven by major projects, with increased investment up to US$41bil in 2025 (from US$33bil in 2024).
• However, we do not discount the possibility of this contract initially yielding lower margins. This is due to a one-off mobilisation cost associated with transporting the vessel over to UAE. Our channel checks indicate majority of its AHTS vessels are in Malaysian waters. Additionally, the group will now be exposed to foreign exchange risk as the contract will be paid in USD currency. 1,450 1,500 1,550 1,600 1,650 1,700 0.0 0.5 1.0 1.5 2.0 2.5 3.0 KEYFIELD MK FBMKLCI Index OIL & GAS KEYFIELD INTERNATIONAL (KEYFIELD MK EQUITY, KEYF.KL) 05 Feb 2025 First foray into the Middle East Company Report BUY Muhammad Nuur Ashman Ab Razak muhammad-nuur- ashman.a@ambankgroup.com +603 2036 1221 (Maintained) Rationale for report: Company Update

1. Slower-than-expected activity in offshore exploration, production, and development,
2. Higher operating costs, from increased material costs or labor shortages,
3. Geopolitical and economic uncertainties impacting oil prices,
4. A sharp drop in oil prices, potentially triggering an industry de-rating, and
5. Continued sector de-rating by banks and investors due to ESG and climate change prerogatives

EXHIBIT 1: VALUATIONS

Target PE (x) 10

CY26 EPS 31.5

ESG premium -

12-month target price RM3.25

Source: AmInvest Research - 5 Feb 2025