Swiber   

at what price to buy?

Singapore's Swiber wins 31 mln usd contract in Malaysia      6/25/2007 8:34:00 AM

SINGAPORE (XFN-ASIA) - Swiber Holdings Ltd said it has secured a 31 mln usd contract from an unnamed customer to perform offshore installation works on an oil production platform in Puteri Wellhead in Malaysia. Commencing in August, the project is expected to be completed in October, said Singapore-based Swiber which provides engineering and other support services to the oil and gas industry (1 usd = 1.53 sgd) singapore@xfn.com MMMM

 

Never totally believe in analyst. It is best to assess and believe in yourself........

 

Not all target prices are incorrect. If one had bought Cosco on its first buy rating with its target price years ago, you would have made money. I agree sometimes target price can be inflated. 

 

whoever try to beleive these target price eventually sure get burnt

 

Tks kovan8. Another coverage from Westcomb with tp of $3.

The Group's performance in FY07 and FY08will be significantly boosted by its fleet expansion and new contracts securedsuch as the LOI contract value of US$146.6m. We are maintaining our net earnings of US$32m for FY07 and US$45m for FY08.

It is currently trading at PERs of 16x for FY07 and 11x for FY08. Pegging its valuation at 0.2x FY07's PEG, we derive a 12-month price target of $3.00, upgrade from $2.08previously, undemanding for a high growth marine entity with an implied PER of 16x FY08's EPS.

 

hi zl, DBS Vickers Securities did the coverage:

DBS Vickers Securities has started covering Swiber Holdings Ltd, an integrated service provider to the offshore oil and gas industry, with a "buy" rating and a 12-month price target of 2.76 sgd. The brokerage said it believes the firm has a clear growth strategy and has strategically positioned itself as a niche offshore engineering, procurement, construction, installation and commissioning (EPCIC) provider for shallow water in Asia, where there is no dominant leader. "We see 2007 as Swiber's watershed year for new contract wins, after having secured 167.9 mln usd in new offshore EPCIC orders year-to-date. Total value for year-to-date new orders is already 3.6 times the total offshore EPCIC contract values that Swiber obtained in 2002-2006." DBS said in a client note. "This shall set the stage for strong earnings growth momentum in our 2007-2009 forecast period, with an impressive three-year recurring net profit CAGR at 87 pct," it added.

DBS expects Swiber's net profit to grow from 12.1 mln usd last year to 49.9 mln this year, 66.8 mln next year, and 80.4 mln in 2009. At 9.30 am, Swiber was up 0.15 sgd or 8.02 pct at 2.02, after rising to an all-time high of 2.05 earlier, with 3.72 mln shares traded.

*

 

 

A broker issued a buy note with a tp of $2.76. Don't know which broker.

 

So, if one has bought Swiber on 04 June 2007,

when a downtrend was announced,

one would have profitted in just a few days.

On the other hand, if a rookie were to sell after hearing the downtrend forecast,

profit would have been lost in just a few days,

since the stock actually  rose from 1.63 to 1.92  (30cents) within 3 days after the forecast on 04 June.

 

So, if one has bought Swiber on 04 June 2007, when a downtrend was announced, one would have profitted in just a few days.

On the other hand, if a rookie were to sell after hearing the downtrend forecast, profit would have been lost in just a few days, since the stock actually  rose from 1.63 to 1.92  (20cents) within 3 days after the forecast on 04 June.

 

From 04 June 2007 till today... Swiber has been uptrending nicely,

reaching 1.92 since that low point... :)

 

It has announced that it has entered into a MOU with Emirates Investments Group L.L.C., an investment company based in the UAE. The management is confident that the proposed jv will be well positioned to capture a slice of the growing market in the Middle East.

 

Hi Singaporeregal

Three cheers to you for being so selfless with your TA .  Sorry, it shd be "be guided by her TA" - don't regret later.


 

 

Hi Singaporeregal

Thanks for being  spot on in your TA. Just a technical rebound  - be guarded by her TA  - sell now, don't regret later. No guarantee of new biz except MOU.  

 

Good news below.........

http://info.sgx.com/webcorannc.nsf/110128af387d710b48256f36001a7d60/c99a3d134632f386482572f4002d913e?OpenDocument

 

Swiber is on a steady downtrend now. The TA charts look bearish with Acc/Dist and chaikin downtrending.

 

very sound downtrend, -36c since 15 May. why? any news about this baby. thx in advance.

 

Many thanks to musicwhiz5 for the detailed report. Will probably hold on to this growth stock for the long term 

 

Hi Raymondyap,

Yes, I was there at the AGM (took leave to go) and I had a chat with the Chairman himself Mr. Raymond Goh after the official business of the AGM was concluded. So yes, I can give a summary of what he said but please note that sensitive information pertaining to contracts, deals or price-sensitive information CANNOT be released through such forums, but only through proper channels such as SGXNet via a formal corporate announcement. Thus, I am merely articulating the views of the Chairman during my brief and informal chat with him over coffee. Below are the salient points (some reposted from SI Forum, investors should have some background info on the company and their plans from the corporate presentation released on April 21, 2007):-

1) There were queries on the O&G industry and how it can sustain the EPCIC activities. Basically, Mr. Goh mentioned that most of the exploration for offshore is still carried out in shallow waters (about 90%) and for Middle East, it is 100% shallow water. He sees deep water (currently 10% of the market) as the future and should it become more popular, Swiber will attempt to diversify into this market. But currently, he has a team of very experienced senior Mgt to develop the business. The new vessels planned in the second wave of fleet expansion are also part of the plan to stay ahead and to offer a better suite of services to customers. From what I gathered, they seem to be already planning a third wave of vessel acquisitions depending on the demand for their EPCIC services and the number of contracts they can secure.

2) I was assured that all vessel orders come with firm charter contracts, and that 14 vessels were slated for delivery this year, thus it will boost their fleet and allow for better marine support services. Since their business targets a niche market, there is healthy demand for their vessels to support the EPCIC services which they offer, and as mentioned in their Annual Report, marine support will only take up about 30% of their revenue pie, with EPCIC constituting the bulk of it.

3) More details of the S&L will be announced in due course, as Mr. Goh said that regulatory requirements have to be followed and when the deal is more firmed up, shareholders will naturally be informed through an announcement in SGXNet.

4) Mr. Goh himself is making many trips to the Middle East in order to negotiate for a potential deal and to build up his network and contacts. The BD dept has 3 staff including himself which are focused on building their competencies and reputation in parts of Asia which they have not secured a foothold yet.

5) Mr. Goh also mentioned that most competitors were located in the USA (4 of them), one in Japan and another somewhere else (can't recall !), but basically Swiber is the only Asian company doing EPCIC to be offered a major contract from Shell. Thus, the USA companies who are already in Asia face little or no competition from Asian competitors so far, but their cost structure is much higher as they do not have a RO or permanent establishment here. This would give Swiber a cost-competitive advantage, plus the Brunei Shell deal has cemented their reputation as one of the "bigger" players.

6) Overall, Mr. Goh expressed much optimism going forward as he believes the company is guided by a very capable and competent team who have the right strategic vision and plan to propel the company to greater heights. Most of the mgt team are from countries as diverse as Australia, France and New Zealand and they bring with them a wealth of experience. The sheerleg barge idea (on order for FY 2008) incidentally came from one of the Mgt team who is a non-Asian (sorry I can't recall who it is !).

7) Personally, I remain cautiously optimistic about the company's prospects. So far, they haven't clinched any major or minor projects after the announcement of the Brunei Shell deal and it would be premature of them to rest on their laurels after achieving one very significant success. Deal flow is important for the company and establishing offices in countries with prospects is equally important. In this aspect, Mr. Goh has 15 years of experience and he knows many industry veterans, so perhaps we can look forward to good news to come.

8) Note that on May 8, 2007, the 6-month moratorium for Pre-IPO shareholders ends and if the price goes down significantly, I see this as an opportunity to buy more of the company. Personally, I am vested at $1.01 and will not increase my position unless it dips below my buy price as I prefer to average down instead of averaging up.

9) The company should be releasing its 1Q 2007 results pretty soon. I do not expect a vast improvement over 1Q 2006 as I noted that most of the Indian LOI only begin in April-May 2007 which is in the 2Q 2007, and their order book carried forward from FY 2006 is about US$25 million, of which I do not know how many % will be recognized in 1Q 2007. Even then, their NP margin may not be as high as for FY 2005 because they may still be chartering vessels from 3rd parties as their own vessels are not ready yet. Thus, I feel we can only see significant improvement in margins and earnings once the rest of the LOI kick in and once the 14 new vessels come online.

 

Hope this posting helps. Have a great weekend to all Swiber shareholders cum investors !

 

anyone care to update us about the AGM held on 30th April? Did they announce any dividends and good order books? Vested at 1.65 and thinking of holding on...

 

Thanks musicwhiz5 for your going out of your way to compute the fair value figure for the benefit of all SJ participants. Am sure your  "involuntary spirit" is deeply appreciated. Was just clarifying the matter - my sincere apologies for raising it.    .