Rotary Engg   

Rotary FA and TA

Shell Bukom is preparing for their groundbreaking ceremony for the PM to come mid oct.. any idea who get the project?

 

    Analyst reports do vary over a wide range. Sometimes they are right but often they are inaccurate. Some, I believe, have their own agenda by covering certain companies. Conflicting reports on one same company are common. Unfortunately, they do affect market sentiments. We need to do our own homework and analyse what the analysts say. In that way, we may not be affected by them so easily. 

 

Yes. Sadly, I agree.

I m quite disappointed with the low fair price given. OCBC gave it 0.88 and this time ard, CLSA only gave it 0.61.

However, i still believe its long term potential

 

It remains a subcontractor as its capabilities are largely confines to the materials/ engg procurement/design for pipes and tanks used in the petrochemical industry. Therefore, revenues in this core business are likely to remain chunky. CLSA has a fair value of $0.61 (15x PE), assuming one more Universal type project is won and more lumpy / cyclical project services.



Based on this, it doesn't have much upside.

 

V high potential...though low volume. Strong support at 0.57 - 0.58. *vested* :)

 

It seems it is not in people radar yet! But I fully agree this is a stock with very good potential! I am looking to enter when there is a slight weakness in the market.

 

It is likely to sustain its growth momentum in H2 on the back of demand for its services in the oil and gas industry, CFOAlex Goh said.



Its first-half net profit surged to a record $16.04m from $3.24m a year before, as sales rose 150% to $202.1m.



"We are bullish on sustaining strong performance and hope to maintain the same momentum that gave us our firm first-half results," Alex Goh said in an interview with XFN-Asia.



The company, which provides engineering, procurement, construction and maintenance services to the oil and gas industry, believes it will benefit from Singapore's status as the third biggest oil trading center in the world.



Singapore continues to attract big investments by oil and gas majors, with Royal Dutch Shell spending US$3b over the next few years on a new petrochemicals complex at Pulau Bukom here.



"Companies are taking a serious view, from an investment standpoint, and we believe these could very quickly translate to opportunities for Rotary to be considered," Goh said.



The value of Rotary's order book was $525m in June, and the firm is confident that it will continue to grow. It recently won $24m contract with Nexsol (Singapore) Ltd.



Goh said Rotary would continue to bid for work on projects such as Shell's petrochemicals complex.



"We have supported Shell quite a bit." Goh said. "So with their mega-projects, there are invitations from them for us to basically look at some of the packages."



Rotary Engineering is also seeking opportunities overseas.



Citing estimates in the World Energy Outlook 2005 report, Rotary said investment in oil-and-gas-related projects is expected to exceed US$100b in the next 20 years.



One of its joint venture companies in Saudi Arabia, Rotary Arabia, is expected to start booking orders and to be earnings-accretive by next year.



"There has been no contribution to date. However, we are confident of securing some projects soon and it should contribute to the group from next year," Goh said.



"The largest oil company in the world, Saudi Aramco, and SABIC have taken notice of us and, having visited our project sites in Singapore, have pre-qualified us as preferred service providers," he said.



The firm believes this is the first step towards being invited to bid for the many projects being planned in Saudi Arabia.



To take opportunities there, Rotary Engineering has invested in another joint venture, Petrol Steel Co Ltd. Rotary Engineering is also looking for other joint ventures to expand its operations. It said it was well positioned to capitalize on opportunities in Thailand and Indochina.



Rotary believes its $547m Universal Terminal project on Jurong Island here, which will be one of the world's largest independent oil terminals when completed at the end of next year, will enable the firm to find work on a similar scale.



"We see the Universal Terminal project as a springboard for Rotary to [secure] similar-size jobs, both in Singapore and beyond, as we now have the necessary resources at our disposal," Goh said. "We intend to leverage on this position of strength to maximize our potential in our core business," he said.

 

Thank you allan.

 

  No clear buy signal yet. Attempted to break downtrend resistance but closed just below the resistance line. Volume is still relatively low. 2-day EMA just crossed over the 19-Day EMA. However, MACD signal is mixed. The stock could still be consolidating. This is my interpretation of the chart. For reference only.

 

I show interest in this counter too, any TA gurus here can advise us with some TA information please?

 

Hi 10-4-1, remember to play i-bet also. Can also get back some kopi-$$$. Monday to Friday play stock market, Sat to Sun play 4-D. Cheers!

 

Good reading materials on Rotary. It is a good company with good potential . I've been tracking this one for quite a long time and I like their ' story ' and that's the reason I'm still holding on for better margin.

Hi Cheapcheap, I think you'll be able to get at  around  56c. If i were u, i'll just buy&hold this one. BTW, I've just put $2 on the number 1041...hahaha...wish me luck! Cheers!

 

Business Times

Published September 14, 2006

STOCK FOCUS

Rotary shines among smaller marine stocks More brokers are taking notice of this ECP service provider, which has won major contracts at home and hopes to bag some in Mid-East, writes TEH HOOILING Email this article Print article Feedback IT IS often the case in the movies or in an orchestra that the spotlight falls on the major stars, with the bit players usually receiving scant notice, even though they may be good. The stock market is no different. It is usually the sizeable companies with substantial chunks of the market share which will hog investors' attention. Smaller outfits tend not to figure on the radar screen of most professional investors. IT IS often the case in the movies or in an orchestra that the spotlight falls on the major stars, with the bit players usually receiving scant notice, even though they may be good. The stock market is no different. It is usually the sizeable companies with substantial chunks of the market share which will hog investors' attention. Smaller outfits tend not to figure on the radar screen of most professional investors. Good prospects: In January, Rotary bagged its biggest contract to date - a $535 million deal from local oil trader Hin Leong Trading and its partner Chinese giant PetroChina to build an oil terminal on Jurong Island (above) But many of today's superstars started their careers in bit roles. All it takes is one breakthrough role, and when he or she gets noticed, their ascent can be phenomenal. So, too, when the smaller stocks get noticed. The offshore and marine theme has been in play for the past few years. But it was Keppel Corp and SembCorp Marine which attracted the most attention and funds. Until recently, stocks like Pan-United Marine, ASL Marine and Labroy Marine were in the shadows. That is until the market wakes up one morning and decides it's time to back the second-liners which don't come with a hefty price tag as yet. As recently as three months ago, Pan-United Marine was trading at 70 cents a share. It is now $1.20, even after distributing dividends of some 11 cents last month. In August, ASL Marine was changing hands at 63 cents. It has surged some 40 per cent in the past six weeks. One company which has recently won a 'career-defining' role is Rotary Engineering. Rotary's core business is the provision of engineering design, procurement and construction (ECP) of oil storage tank terminals and related facilities to oil majors and oil traders. It also provides third-party maintenance services of the processing and storage facilities to the oil and gas and petrochemical industries. In January this year, it bagged its biggest contract to date - a $535 million deal from local oil trader Hin Leong Trading and its partner Chinese giant PetroChina to build an oil terminal with a storage capacity of 2.3 million cubic metres (cbm). To be built on Jurong Island, Universal Terminal (UT) will have 73 custom-built tanks and 12 berths of its own, including two VLCC (very large crude carrier) berths. The project is scheduled to be completed by end 2007. According to Rotary's chief financial officer Alex Goh, 18 per cent of the work was completed in the first half of the group's financial year ended June 31, 2006. During that period, Rotary's revenue surged 150 per cent to $202 million and its net profit jumped to $16 million from just $3.2 million a year ago. Taking on the world Rotary, said Mr Goh, will book the higher margin parts of the contract in the second half of this year and the first half of 2007. The significance of the UT project does not end next year. 'It is also an opportunity for us to showcase to the world our capability to take on a project of this scale,' Mr Goh said. For example, having checked out Rotary's work on UT, the national oil company of Saudi Arabia - Saudi Aramco - has pre-qualified Rotary as one of its preferred ECP service providers. Mr Goh is hopeful of bagging some contracts - albeit small ones as a start - from the world's largest oil company with the world's largest proven oil reserves in the next few months. 'The Middle East is the next frontier for us; we are going out to be a player there,' said Mr Goh who had spent more than a decade of his working life in oil giant Mobil. It is anticipated that the Gulf region will invest US$200 billion on oil and gas infrastructure in the next 10 to 15 years, he added. 'The oft-repeated saying there is 'There are a lot of jobs chasing too few service providers'.' Rotary, through a 50-50 joint venture, has received approval from the Saudi authorities to establish its fabrication yard in the Gulf at Jubail Industrial Park. The facility, expected to be ready in a year's time, will be the group's fifth. It already has two in Singapore (one in Tuas and the other on Jurong Island), one in Rayong, Thailand, and the last in Batam, Indonesia. It is also looking into setting up a sixth site in Shanghai, in anticipation of its customers' increased investments there to feed the growing energy demand in China as it industrialises. But even in Singapore, there will be enough work to keep Rotary busy. Singapore is now the world's third-largest oil trading hub. Its current total storage capacity of 3.5 million cbm has been running at 90 per cent for the past five years. Some 6.45 million cbm of new capacity will be built in the next few years. Another source of new projects is from the chemical industry which is pumping an average of $1.5 billion of investments a year into Singapore over the past four years. Another incremental and recurrent source of income is the provision of maintenance service. There are 70 process plants on Jurong Island, and the estimated annual maintenance budget average is $5.5 million each. As at June 30, 2006, Rotary's outstanding order book amounted to $525 million. Its latest deal was a $24 million contract to build a biodiesel process plant and its related facilities for a subsidiary of Peter Cremer (Singapore) GmBH on Jurong Island. Crossing the threshold In addition to its traditional activities, Rotary is also looking into diversifying into related areas, for example, co-owning some of the process plants it builds in the future, so as to grow a bigger stream of recurring income for the group. 'Rotary has always been very prudent, but we are now crossing the threshold to the next level,' said Mr Goh. He thinks that the group's track record and reputation among its existing customers will put it in good stead vis-a-vis competitors and other newcomers vying for the same pie. At half time, Rotary has already chalked up earnings per share (EPS) of four cents. OCBC Investment Research - the only research outfit to cover the stock - has a forecast EPS of 9.3 cents for the full year. Based on its last traded stock price of 55.5 cents, Rotary is trading at an earnings multiple of just six times. However, analyst Chong Wee Lee is cautious about the outlook for 2007. He's predicting the EPS to decline to 7.8 cents. Even then, the price-earnings ratio, at seven times, is not excessive. And if Rotary is successful in executing its plans, growing the bottom line is not out of the question. In Mr Goh's own words: 'We are confident that Rotary is in for some good times. Once everything is in place, the company is a good investment (at current levels). Investors should look at it.' And it is understood that more brokers are taking notice. One foreign broker - CLSA - has met the management on a few occasions.

 

Well done! This is really a good post. ExcellentZ!

 

BT 14 Sep 05

Published September 14, 2006

Lessons from the brink Rotary spreads risks by putting bets in many markets, writes CHUANG PECK MING HOW the fortunes of Rotary Engineering have turned. The mainboard-listed company started in 1972 with a capital of just $15,000, chipped in by five partners fed up with working for others and wanted to be their own boss. HOW the fortunes of Rotary Engineering have turned. The mainboard-listed company started in 1972 with a capital of just $15,000, chipped in by five partners fed up with working for others and wanted to be their own boss. "We got to be more flexible and accept what's happening in front of us, accept reality and be more pragmatic.' - Mr Chia Today, the engineering, procurement and construction company that serves the rich oil and gas industry is worth some $225 million in the stock market. Annual sales, projected to hit $400 million this year, are 40 times they were in 1984. Back in 1984, in fact, Rotary was on the brink of going bust, hit by a double whammy of poor business and high overheads, according to Chia Kim Piow, the only one of the five founders still active in the company today. 'It was the toughest time we ever had. We almost went bankrupt,' recalls Mr Chia, who is chairman and managing director of Rotary. 'The industry was in recession even before the recession hit the whole economy. It always comes early for us,' he says. Rotary had by then grown into an amalgamation of disparate businesses going separate ways. While the businesses shared a common roof, they were not pulling in enough revenue to support the overlapping overheads which had become a heavy burden. 'So it's either we broke up or we were going to sink,' Mr Chia says. 'We broke off nicely and that's how we survived.' And he stinged and overhauled Rotary, took advantage of the lull in the industry to hire more engineers let off by a Japanese rival - and sharpen his company's focus on engineering. 'If you feel you can't survive, you should reorganise,' says Mr Chia of the lessons he learnt from his close encounter with bankruptcy. There's also the matter of face, or ego, which refuses to accept the inevitable and lead to inaction, he says. 'We can always have this face value which can sometimes kill. We got to be more flexible and accept what's happening in front of us, accept reality and be more pragmatic. It you want face, you can't survive.' Eating humble pie when he has to ward off creditors during that critical year when Rotary almost went over the edge was a horrible experience which has taught Mr Chia to be more prudent in later years. So he has shunned unfamiliar terrain in business and stopped being greedy. 'We should be pragmatic and specialise in what we are good at, because in life there are so many temptations, especially when you are doing well,' Mr Chia says. 'People will come to you and ask you to do this, do that, to go into something new. We must be prudent and careful.' Staying focused and watching his steps closely, Mr Chia has since kept Rotary growing in good shape. The company went public in 1993 and is spreading its wings in the global markets, having established a presence in Malaysia, Thailand, Indonesia, Australia, China and, most recently, the Middle East. It's often a multinational company client here that got Rotary launched in an overseas market. Impressed with the job Rotary has done, the MNC client would offer the company more projects elsewhere where the former also operates. 'That's how we got started in Thailand,' Mr Chia recalls. 'We've never been there. Our client gave us a $40 million contract and we started from scratch. Likewise in China where we went in 1993.' Going global is not just his answer to the limitations of the home market. Mr Chia says by putting its bets in many markets, Rotary could spread its risks so that when, say, the Singapore market dries up, as it was last year, there's still enough projects in other markets to keep the company afloat. For now, Rotary never has it so good. It clinched its biggest ever deal at the start of this year - a $535 million contract to work on the $750 million Universal Terminal on Jurong Island. 'This is a milestone for Rotary,' Mr Chia says. 'The number of storage tanks at a single terminal at one time make the project the largest that Rotary has undertaken, in terms of numbers and project value.' Evan Lim, executive director of Hin Leong Trading, the company that awarded the contract, says it's because of Rotary's international experience that won the deal. The size of the project has put the spotlight on Rotary, which already has potential clients from the Middle East knocking at its door. 'It (the project) is my springboard to bigger terminal jobs,' Mr Chia says. Rotary is certainly on a roll. The company, which boasts an outstanding order book of $525 million as at end-June, reported a 150 per cent jump to $202.1 million in sales in the first six months of the year, while net profits rose almost five times to $16 million. 'There are lots of opportunities because of the process industry's growth,' Mr Chia says. 'Oil prices have gone up and there are many projects around the world, especially in the Middle East. There's high demand in China and India.'

 

Hi 10-4-1, this is really a good company with good order books. It has been climbing up steadily due to strong earnings. I am not vested but will be looking to buy into it with my CPF funds. Cheers!!

 

Aiya Cheapcheap, any company can also shoot up IF Fund Managers show sign of interest and start pushing. The question is how long can this 'manaeuvre' last IF the company has got no substance? I'm sure many Investors will get caught in such an event. Cheers!

PS. I'm not saying Rotary is not a good Company - this one you've to play your cards right!

 

buying rotary is not buying lottery. This company has good management will proven track records. can be a SPC if fund managers and big players help to push it up!

 

Hi elizlow,



The 5th wave is the last up-wave. You can read more at the Elliott Wave Theory article.

 

Sporeguy, may I know what is 5th wave, is it good or bad. Can advise the support and resistance price if it is good to load. Thanks.