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KS Engery Halt today. Hopefully good news.
ACQUISITION OF A SINGAPORE SHELF COMPANY
he Board of Directors of KS Energy Services Limited ("KS Energy") wishes to announce that the Company has acquired a Singapore shelf company with an issued capital of S$1.00 to be known as 'KS Flow Control Pte. Ltd.'
This company will be wholly-owned by KS Energy and the principal activities of KS Flow Control Pte. Ltd. will be those of trading and supply of instrumentation and valves; and industrial products for the oil and gas, marine and shipbuilding industries.
The abovementioned transaction is not expected to have any material effect on the net earnings per share and net tangible assets per share of the Company for the financial year ending 31 December 2007.
None of the directors or substantial shareholders of the Company has any interest, direct or indirect on the abovementioned transaction.
BY ORDER OF THE BOARD
Lim Ka Bee
Company Secretary
2 April 2007
OCBC said that it is a laggard and raised its tp from $3.40 to $3.76. Don't know how they can call it a laggard when it has risen about 16x this few years.
DBSV said it has raised its target price to $3.19 after its equally-owned JV with Sinwa KS won a US$109.50m deal to charter a self-propelled jack-up drill rig to an an unnamed oil exploration company in Central America.
DBSV said it has raised its 2008 net profit estimate by 13% to $60.8m to factor in initial contributions from this 5-year charter contract.
KS Energy's net profit should rise from $33.60m in 2005 to $47.10m this year, and maintain that profit level for 2007, DBSV said.
Over the years, it has transformed itself from a regional oil & gas parts supplier into a one-stop capital equipment service provider that offers efficient and cost-effective solutions. This unique value proposition enticed new shareholder Kris Wiluan to invest in KSES, and is being positioned to penetrate Indonesia's O&G market as well as strengthening the competitiveness of Indonesia-based Pacific Oilfields Equipment Investment Corporation (controlled by Mr Wiluan).
KE thinks this is a good fit given the under-investments in Indonesia's market in the past decade, which now requires cost-competitive and efficient solutions to kick start production.
Cheaper than peers; it is trading at a relatively affordable 13.3x FY07 PE − a discount to the other rig plays' valuations. Relative to its growth prospects, it continues to offer value as KE expects the group to grow at a three-year EPS CAGR of 27% (2005-08), driven by capital equipment order flows. Based on 0.6x PEG, KE has a fair value of $2.97.
Goldman Sachs has started covering with a target price of $3.00 because it sees the supplier of equipment to the oil and gas industry benefitting from the boom in the industry.
"Not only is KS Energy's distribution business seeing a strong momentum, KS Energy has cleverly carved out a niche in the capital equipment business," Goldman Sachs said. "We see KS Energy's profitability switching into higher gear as it develops a niche as an oil and gas equipment provider," the brokerage said.
Goldman expects KS Energy's net profit to rise to $45.8m this year, to $50.9m next year and to $57.5m in 2008.
OCBC says it has lifted its fair value to $3.28 after the company announced that it would lease a refurbished seismic exploration vessel to Pacific Exploration Pte Ltd (PEX) for four years in a bareboat charter deal valued at about US$21m.
KS Energy said it would set up a joint venture with PEX, with each having an equal stake, which would own the seismic exploration vessel. PEX is a provider of seismic data acquisition services which operates in Asian waters.
"This new contract reaffirms our earlier suggestion that the lack of major contract news flow from KS Energy's existing clientele since late April is unsustainable as the anticipated demand for equipment refurbishment works should burst open the floodgate eventually," OCBC said in a note to clients.
Significant contributions can be expected from the 75:25 JV with Tubindo can be expected. It opens up a potential Indonesian refurbishment market of up to 106 drilling rigs. The JV will use Tubindo's rig refurbishment facility in Batam, which is expected to be completed by end 06. The facility can handle 4-5 land rigs concurrently. Assuming an average of 3 months refurbishment period, the Phase 1 development can handle a max of 16-20 land rigs per annum. The initial estimates for the first wave of land rig projects range from US$21m to US$27m per annum at full swing.
DBSV and OCBC has price targets of $2.90 and $3.24 respectively.
Proposed establishment of JV with Pt Citra Tubindo Tbk for the provision of refurbishment and charter procurement services for rigs.
Rebounded on hopes it will be part of a consortium that would win contracts from the Cepu Oilfield in Indonesia.
Surging ol prices, and under-investment in the oil E&P industry in the last 20 years underpin future growth. It can harness its expertise to provide customers with cost and operationally effective equipment solutions for refurbishment of aged rigs/equipment. In addition, it will benefit from the growing consumables and equipment replacement market for the oil & gas industry.
Its comparative advantage lies in its wide network in the oil & gas industry, and its ability to leverage on its database for any possible replacement needs. To develop the business a step further, it;s seeking strategic alliances to co-own oil-related assets; thus realising a recurring chartering and mgt income stream. This allows it to benefit from rental rates escalation.
As procurement for oil-related good and services is regulated to give preference to domestic suppliers, it can tap into the new shareholder - Kris Wiluan's comprehensive business network and gain a foothold in the Indonesian market.
DBSV has a price target of $2.86.
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Reported 83% jump in H106 net profit to $31m. This is almost as much as that for the whole of FY05. It has been doubling its bottom-line every year since 2002, during which time its price has risen by a factor of 16. It has undergone several share splits.
wow...think quite lucky..bought in yester 2.03 when nobody want..then unload 2.17 today!! :D only 10 lots..
Hi all,
Is KS Energy a good buy now?
thanks.
Fund managers visited their Batam plant today. There was some hype surrounding the inauguration of the Kabil offshore port (partly managed by PT Citra Tubindo owned by Kris Wiluan who is the current substantial shareholder of KS Energy) that was to be attended by the Indonesian president and Australia's prime minister.
Thanks very much for your encouragement, solomonster and singaporegal. I get info from many sources, my view changes with events and I look at a situation from different perspectives. Much like the fox in the Straits Times article "The world needs more foxes and fewer hedgehogs".
Don't fell discourage. Whatever we do in this world, we always attract 2 opposite force e.g. agree vs disagree, good vs bad. As long as you make profit and your conscious is clear, who?s care!!!
don't worry about the bad posts Nostradamus... I get my fair share of them as well. I guess some people really don't like my TA approach to trading. I don't slam FA people because I believe they know what they're doing. Its just that I just find TA suits me best.
anyway, I read your posts and I think you're very knowledgable. You're contributing a lot to this forum with your insights and writings.
anyway, I read your posts and I think you're very knowledgable. You're contributing a lot to this forum with your insights and writings.
Thanks solomonster for your support. I got my info from here. If you are interested, we can discuss it here. You see, info and timing are very important. That's why, people pay for them.
Unfortunatedly, there are some people who are biased and keep giving me bad post ratings. As you can see for yourself. If there's a trophy for it. I'll win it hands down with the hundreds of bad post ratings I have. I'm not interested in writing commentaries or something that may not be true, but pleases or agrees with somebody. I'm only interested in writing facts and good analysis.
Nostradamus, i read your post and i found that you are very informative on latest development. Just wondering, how do you manage to keep track and where?
Thanks and great that you are in this forum.