OVERVIEW:
Headquartered in Singapore, the counter is an engineering and fabrication solutions provider focused on the offshore oil & gas industry. With its experience in delivering vessels and complex projects, it has established as a front runner in the fabrication of liftboats and other oil & gas related assets in South East Asia (SEA). It owns and operates fabrication yards in Vietnam, Singapore as well as engineering facility in Houston, US.
HIGHLIGHTS:
(1) 9MFY15 net profit down 12% year on year due to higher administrative expenses. However, gross profit up 5% and gross margin was stable at 22%.
(2) It announced new order win of USD175m from client in SEA region. Totally, it has secured USD501m of contracts. This marks 3 conservative quarters of increasing orderbook (USD350m, 370m, 520m as at end 1Q15, 2Q15 and 3Q15).
(3) Crude oil prices has been hovering around USD51 per barrel. Technically, it has built support ~ USD50 per barrel. From its one year chart, it could been forming higher low in the trend, so more upside movement is expected.
INVESTMENT THEMES:
(1) Following the latest financial results announcement on 7 July, the counter has been surging >10%. It indicated positive response from the market towards its business prospect. From the weekly chart as below, the counter has been showing strong rebound lately. Both EMA10 and 20 are converging and pointing upwards. Traders could take position for short term gain.
(2) UOB rates this counter based on FY16 price to book value at 0.8x, thus deriving target price of $0.87. Current trading price basically represent 100% room to grow. It is also interesting to note that the counter lately issued SGD29.5m of warrants with exercise price at USD0.56 to Ezion. It further indicate the ambition of management.
ENTRY PRICE:
BUY ~$0.45
No comments:
Post a Comment