COASTAL (5071) : RHB Research maintains Buy on Coastal Contracts
KUALA LUMPUR: RHB Research has maintained its Buy call on Coastal Contracts with a target price of RM4.80 from RM5.90 as it revised the shipbuilding P/E valuations to nine times P/E to be inline with the OSV valuations of 8-13 times.
In a note on Monday, RHB said Coastal’s 9M14 core profit of RM153mil, met 79% of its/ consensus estimates, on the back of 38% revenue growth.
This was supported by a higher number of vessel deliveries, andimproved net profit margins to 22% arising from afavourable product mix comprising high-value offshore support vessels(OSV).
Its vessel chartering business reported poo rperformance, due to lower fleet size and utilisation rate. However,contributions are not significant, it said.
RHB said Coastal's orderbook stood at RM2.5bil as at Sep 2014.
"Of this, RM1.3bil is forshipbuilding and vessel sales orders which will be delivered to customers up to 2015.
"The balance RM1.2bil orderbook is for the 8+4-year charterof a gas compressor service unit (GCSU) to Mexico-based Petroleos Mexicanos (Pemex), which commences in 2H15.
"The group now expects its first high-spec jack-up (JU) rig to be delivered by 1H15 as it is still negotiating for potential charters.
"We do not see this as a surprise as our JU rig assumptions is at 100 day utilisation. Expected delivery for the second JU rig remains at 2H15," it noted.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research has maintained its Buy call on Coastal Contracts with a target price of RM4.80 from RM5.90 as it revised the shipbuilding P/E valuations to nine times P/E to be inline with the OSV valuations of 8-13 times.
In a note on Monday, RHB said Coastal’s 9M14 core profit of RM153mil, met 79% of its/ consensus estimates, on the back of 38% revenue growth.
This was supported by a higher number of vessel deliveries, andimproved net profit margins to 22% arising from afavourable product mix comprising high-value offshore support vessels(OSV).
Its vessel chartering business reported poo rperformance, due to lower fleet size and utilisation rate. However,contributions are not significant, it said.
RHB said Coastal's orderbook stood at RM2.5bil as at Sep 2014.
"Of this, RM1.3bil is forshipbuilding and vessel sales orders which will be delivered to customers up to 2015.
"The balance RM1.2bil orderbook is for the 8+4-year charterof a gas compressor service unit (GCSU) to Mexico-based Petroleos Mexicanos (Pemex), which commences in 2H15.
"The group now expects its first high-spec jack-up (JU) rig to be delivered by 1H15 as it is still negotiating for potential charters.
"We do not see this as a surprise as our JU rig assumptions is at 100 day utilisation. Expected delivery for the second JU rig remains at 2H15," it noted.
http://www.thestar.com.my
