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Hi anyone here thought of buying Labroy marine's 38% owned subsidiary BengKuang Marine..proposing 1 for 3 stocksplit..any comments?..details of bengkuang are as follow
| Story Beng Kuang Marine (BKM) is primarily engaged in the business of providing corrosion prevention and infrastructure engineering services to the marine, offshore, and oil and gas industries. They also supply and distribute over 300 types of hardware equipment, tools and other products under their house brand Master". - Point We expect BKM's three strategically integrated business divisions to benefit from the booming industry outlook, and its parent company Labroy Marine's strong expansion plans. Specifically, the building of more rigs and offshore vessels will generate more outsourcing projects for BKM's fast emerging infrastructure engineering business and higher activities for its provision of hullside corrosion prevention services. - Relevance We predict BKM's net profit CAGR in the FY07-09 forecast periods to be 41%, attributable to high-double digit revenue growth and better operating leverage. We value BKM at 16x FY08 PER, which gives a fair value of S$1.10. We initiate coverage on BKM with a BUY rating. - BKM to benefit from Labroy's venture into offshore market. Labroy has secured newbuild contracts for four jackup rigs and two heavy lift jack-up vessels. We expect BKM to benefit significantly from Labroy's venture into the offshore sector, through 1) the proximity of its infrastructure engineering facilities to Labroy's yards in Batam, 2) its established business relationships with Labroy for its three business divisions, and 3) Labroy's 38% stake in BKM which provides financial incentives given that profits flow back to the parent company. - Infrastructure engineering business not solely dependent on Labroy. BKM is already actively increasing its capacity to ride on the growth of other rig and offshore builders in the region, like Keppel Corp. BKM has spent S$1.87m to purchase a 30-year leasehold waterfront land from the local authority, with waterfront of approximately 350 metres. BKM will develop the 32.8 hectares of land to more than quadruple the current capacity of its Infrastructure Engineering's fabrication facilities on Batam. We believe that these new facilities will position BKM to ride on the booming offshore and marine industry in the region; as capacity is now available for BKM to handle more oilrig module fabrications. - Market leader for the provision of external corrosion prevention services. We believe that BKM is the leading provider for hullside corrosion prevention services in the region. BKM is the resident contractor for seven shipyards in Singapore, as compared with its fragmented competitors relationships with 1 to 2 shipyards each. There are typically 2-3 resident contractors in each shipyard, and BKM believes that it is the leading contractor among them with more than 50% market share in each yard. - Expect strong earnings growth ahead. We are projecting 30% revenue CAGR in our FY07-09 forecast periods; driven by across-the-board strong growth from all business divisions. The infrastructure engineering business is expected to exhibit the highest growth in our forecast periods, due to expectation of higher outsourcing orders from the regional yards. We project BKM's revenue to rise 40.9% y-o-y to S$99.4m and net profit to rise 59.6% y-o-y to S$6.1m in FY07.[/quote]... It's time to accumulate...don't wait till EGM for proposal of 1 for 3 stocksplit to be approved..sure approval...who will vote against it...thinly traded counter as CEO ,Labroy marine related parties hold > 38%..at 84cts and adjusted for the split is about 21cts...sure can make |
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