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Look like not likely to cross $0.9 . Not strength
Disappointed.
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Undervalue gem: - Worth taking a look b4 BB take their position.
Cheer.
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Ilhavo, Portugal – 18/09/2009 – SADIF Investment Analytics, announces a new summary due diligence report covering CH Offshore Limited (C13). The report uses SADIF's powerful StockMarks™ stock rating system and contains important analysis for any current or potential CH Offshore Limited investor.
Report Summary: CH Offshore Limited is a high quality company with a neutral outlook. CH Offshore Limited has strong business growth and is run by efficient management. When compared to its closest peer, Singapore Shipping Corporation Limited, CH Offshore Limited shows similar undervaluation and is more likely to outperform the market.
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Strong buying interest, heading towards TP $0.89:
CH Offshore at 15-month high as DBS says ‘undervalued’, ‘buy’
Tags: Ch Offshore | Dbs Group Holdings
| Written by Bloomberg |
| Tuesday, 15 September 2009 13:39 |
Shares of CH Offshore, climbed to the highest level in 15 months after DBS Group Holdings recommended investors “buy” the stock, saying the offshore logistics provider is “deeply undervalued.”
The stock jumped 14% to 65 cents as of the midday trading break in Singapore, set for its highest close since June 27, 2008.
CH Offshore is trading at a 50% discount to its peers, DBS analyst Jeremy Thia wrote in a note today. “An undervalued CH Offshore may be an attractive merger and acquisition target.”
DBS initiated coverage of the stock with a “buy” rating and a 12-month share-price estimate of 89 cents.
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CH Offshore
September 15, 2009 · Posted in News
- Future dividend payouts to rise as free cash flow is estimated to increase to 8.5 US cents per share in FY11.
- Sustained undervaluation vs. listed peers could trigger M&A interest.
- 58% upside to our target price of S$0.89, at 9x blended FY10/11 PE (FYE June).
- Initiate coverage on CH Offshore with a BUY.
- AHTS fleet with deepwater focus. CH Offshore (CHO) owns and operates eight small AHTS (<8,000 bhp) and five large AHTS (>12,000 bhp) as of end FY09 (FYE June). CHO will increase its fleet of large AHTS to seven by end FY10.
Strong free cash flows amidst steady earnings growth.
We project CHO’s free cash flow per share to rise to 8.5 US cents in FY11 (or equivalent to c.22% of current share price), vs. 2.5 US cents in FY09 and an estimated 1.1 US cents in FY10. This is due to: 1) Non-existence of committed capex after FY10, and 2) our forecast of 7% net profit CAGR in the FY10-11 forecast periods.
6.5% current FY10 dividend yield.
We expect CHO to have 40% dividend payout, vs. recurring net profits, in the FY10-11 forecast periods. The 22% dividend payout in FY09 amidst uncertain economic condition is an anomaly.
Sustained undervaluation could trigger M&A interest.
CHO now trades at 6x recurring FY10 PE (FYE June), vs. 9x average PE for the small-mid cap offshore service providers in our coverage. CHO is also not seen as a core holding for Chuan Hup, its second largest shareholder. Hence, in our opinion, an undervalued CHO may be an attractive M&A target for global AHTS owners, including John Fredriksen’s Deep Sea Supply (which has close to a 5% stake in CHO).
Initiate coverage with BUY.
Our fair value for CHO is S$0.89, based on 9x blended recurring FY10/11 PE (FYE June). This gives around 58% potential upside from current price. We initiate coverage on CHO with a BUY rating.
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Strong buying interest up +0.04 . DBSV coverage buy TP $0.89
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The joint venture has secured an A$350 million ($392 million) contract to supply marine vessels for at least three years to Chevron Corp, which is involved in the development of Australia’s Gorgon gas fields.
“That’s a big deal for Ezion, which reported revenue of only $14.6 million in 1Q2009,” according to The Edge.
Located off the northwest coast of Australia, Gorgon is said to be the world’s single-largest known gas resource, holding as much as US$165 billion ($241 billion) worth of natural gas at current prices.
Chevron owns a 50% stake in the concession and is managing its development. Its partners are ExxonMobil and Royal Dutch Shell.
Ezion is partnering Australia-listed Skilled Group and Hong Kong-listed Pacific Basin Shipping on the project.
The A$350 million contract should commence in 4Q, Ezion says in a statement, and it should have “a positive material impact” on its earnings next year.
The Edge's article, giving the history of the company, said Ezion was a failing electrical wire maker called Nylect Technology a little more than two years ago.
Ezion CEO Chew Thiam Keng was MD of KS Energy Services, a company in the offshore services business that had been sold to Indonesian tycoon Kris Wiluan.
In November 2006, Chew bought a controlling interest in Nylect for $8 million. Among those who invested in Chew’s dream was his ex-boss Tan Kim Seng, the former chairman and controlling shareholder of KS Energy.
Then there was Ezra Holdings, whose founder Lee Kian Soo is now chairman of Ezion.
Others: Roland Ng, managing director of crane owner and operator Tat Hong Holdings; and Tan Boy Tee, the then-controlling shareholder and chairman of shipbuilder Labroy Marine.
Today, Ezion’s largest shareholders are Chew (27.7%) and Ezra (15.5%). Others include several funds such as Legg Mason (8%); Stichting Pensioenfonds (6.5%); and Colonial First State (6.1%).
Last year, Ezion reported a 130% rise in revenue to $31.1 million, and a 100% rise in earnings to $8 million. The PE ratio of Ezion is a whopping 45X and dividend yield a virtually non-existent 0.11% (see table below).
In 1Q2009, revenue was up 211% to $14.6 million, while net earnings climbed 182% to $3.3 million.
There's much more meat in The Edge's article which you can find out from the newsstands or online.
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SSE also in the positive region.
Cheer
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Should get good support today. STI in positive region.
May cross $0.90 soon.
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STI now in the positive region. Let work together to support it.
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1Q09 results in line with expectations ? Ezion reported revenue growth of 211.1% to S$14.6m in 1Q09, mainly due to increase in revenue from offshore logistics support services. In line with increased business activities, the Group's operating expenses increased 177.9% to S$1.7m, resulting in 181.5% net profit growth to S$3.3m in 1Q09.
Gorgon project A$350m contract wins ? Just the beginning ? The contract win of A$350m excites us in three ways - (1) Ezion, being the lead manager of the Consortium, reinforces Ezion's capabilities in the offshore support industry. (2) The contract win of A$350m is just a fraction of the estimated capital expenditure for Gorgon gas field, projected to be around A$50 billion. (3) Given that the Consortium is involved in the early stages of the Gorgon Project, we believe the Consortium is well positioned to capture a substantial portion of the total capital expenditure going forward. The in-depth knowledge expected to be acquired by the Consortium from the early stage involvement is likely to create a high barrier of entry for the Consortium's competitors for subsequent contract biddings.
Earnings forecast revised ? We lower our earnings estimates for FY09F by 15% to S$18.7m, after including contribution from share of profits from Gorgon project as well as pushing back delivery of the first two units of multi-purpose self-propelled jack-up rigs to 4Q09 and 1Q10 (previously assumed 3Q09 delivery).
Maintain BUY with target price revised to S$0.94 ? We change our valuation metric from discounted cash flow to price-to-earning based as we expect the group's activities and growth prospects to be earnings driven. We raise our 12-month target price to S$0.94, based on 10x FY10F EPS, justified by its strong earnings outlook, further underpinned by robust industry dynamics. With an upside potential of 62%, we maintain our BUY recommendation on Ezion.
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1Q09 results in line with expectations ? Ezion reported revenue growth of 211.1% to S$14.6m in 1Q09, mainly due to increase in revenue from offshore logistics support services. In line with increased business activities, the Group's operating expenses increased 177.9% to S$1.7m, resulting in 181.5% net profit growth to S$3.3m in 1Q09.
Gorgon project A$350m contract wins ? Just the beginning ? The contract win of A$350m excites us in three ways - (1) Ezion, being the lead manager of the Consortium, reinforces Ezion's capabilities in the offshore support industry. (2) The contract win of A$350m is just a fraction of the estimated capital expenditure for Gorgon gas field, projected to be around A$50 billion. (3) Given that the Consortium is involved in the early stages of the Gorgon Project, we believe the Consortium is well positioned to capture a substantial portion of the total capital expenditure going forward. The in-depth knowledge expected to be acquired by the Consortium from the early stage involvement is likely to create a high barrier of entry for the Consortium's competitors for subsequent contract biddings.
Earnings forecast revised ? We lower our earnings estimates for FY09F by 15% to S$18.7m, after including contribution from share of profits from Gorgon project as well as pushing back delivery of the first two units of multi-purpose self-propelled jack-up rigs to 4Q09 and 1Q10 (previously assumed 3Q09 delivery).
Maintain BUY with target price revised to S$0.94 ? We change our valuation metric from discounted cash flow to price-to-earning based as we expect the group's activities and growth prospects to be earnings driven. We raise our 12-month target price to S$0.94, based on 10x FY10F EPS, justified by its strong earnings outlook, further underpinned by robust industry dynamics. With an upside potential of 62%, we maintain our BUY recommendation on Ezion.
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Buy
Updated 11:55 AM Sep 02, 2009
CLSA starts coverage with a $1.05 price target, implying 9 times FY '11 earnings. Expects 72 per cent EPS growth in FY '09 and 254 per cent in FY '10, driven by Ezion's bigger fleet, contributions from the Gorgon natural gas project in Australia.
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Had switch out above $2. Now vest in Ezion which is the next better play.
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Smart move. I have incluse EZion and also make some pocket money.
All the best to these who vest
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Heavy buying up:
| 11:43:20 |
0.880 |
115,000 |
Bought from Seller |
| 11:43:15 |
0.880 |
50,000 |
Bought from Seller |
| 11:43:09 |
0.880 |
1,000,000 |
Bought from Seller |
| 11:42:47 |
0.880 |
450,000 |
Bought from Seller |
All the best to these who vest
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SIAS Research in a Sept 8 research report says: "Ezion reported a 195% revenue y-o-y increase for 2Q09 as more of its vessels were deployed this quarter relative to the year before. Cost of sales and servicing rose 280% resulting in a lesser than revenue surge of gross profit by 111%, from $3.6 million to $7.6 million.
"On the whole, the margins for Ezion have been consistent and revenue has been trending upward since 2007. We expect the revenue growth for Ezion to continue following the announcement of the Gorgon Project.
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With sound fundenmental should be good investement :
The Group's principal activity is providing marine logistics and support services to the offshore oil and gas industries. As of 31-Dec-2008, it operated a total fleet of 20 vessels which includes ballastable vessels, tugboats and offshore support vessels. The Group operates in two segments: Offshore Logistics Support Services and Marine Services. Offshore Logistics Support Services segment is engaged in vessel and oil and gas related assets chartering. Marine Services segment is engaged in procurement of equipment and provision of management and engineering services. Operations are carried out in Singapore, Australia, Far East and ASEAN countries.
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STI move within range of -14 to -7. Could end positively if no major bad news.
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Mostly drop cause placement or right result in dilution.
Trade with cautious.
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