HLG: 26 May 2008 Tanjung Offshore - Poor Q108, expect better H208
Tanjung Offshore BUY
Price target RM3.45
Share price at 23 May RM2.37
Investment summary
Annualized Q108 net profit was 35% below HLG forecast and 45% below market estimate due to timing differences surrounding the delivery of engineering equipments and new vessel deliveries. We are maintaining our EPS forecast for FY08-09E and believe net profit in subsequent quarters will be stronger due to: (1) delivery of 3 vessels in FY08E and 2 in FY09E (2) booking of engineering equipment sales in H208. We remain positive on the O&G vessel chartering segment: (1) increase exploration and production (E&P) activities will support strong demand for offshore support vessels. Petronas H108 capex for E&P activities is up +68% to USD2.5bn (2) lagging vessel new-builds vs. replacement market will hold daily charter rates at current level till 2010.
Watch for strong H208
Despite falling below market expectation, Q108 EPS grew an impressive +36% yoy. EPS should pick-up in subsequent quarters once: (1) engineering equipments are delivered to end clients (2) new vessels are commissioned. Valuation at 9x FY09E EPS is 15% discount to domestic peers.
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Showing posts with label Tanjong. Show all posts
Showing posts with label Tanjong. Show all posts
Saturday, 21 June 2008
Sunday, 20 April 2008
HLG: 16 April 2008 Tanjong - Upgrade to BUY
Tanjong Plc BUY
Price target RM19.65
Share price at 15 April RM16.00
Investment summary
We raise our rating on Tanjong from a HOLD to a BUY. Following the recent market sell-down, Tanjong’s share price has fallen –14% YTD, despite sound positive fundamentals: (1) 12% EPS CAGR over FY08-10E from the Globeleq IPP acquisition; (2) valuation multiple expansion due to the potential spin-off of Tanjong’s power division and the local investment vacuum created by the Malakoff de-listing. We are negative on the Malaysian power sector, given poor domestic growth opportunities and dividend yield.
Playing the range
Share price has fallen to a 2-yr low, despite power generation capacity doubling in that period. Tanjong is historically a fundamental range-trading opportunity, and downside is limited at current levels.
Price target RM19.65
Share price at 15 April RM16.00
Investment summary
We raise our rating on Tanjong from a HOLD to a BUY. Following the recent market sell-down, Tanjong’s share price has fallen –14% YTD, despite sound positive fundamentals: (1) 12% EPS CAGR over FY08-10E from the Globeleq IPP acquisition; (2) valuation multiple expansion due to the potential spin-off of Tanjong’s power division and the local investment vacuum created by the Malakoff de-listing. We are negative on the Malaysian power sector, given poor domestic growth opportunities and dividend yield.
Playing the range
Share price has fallen to a 2-yr low, despite power generation capacity doubling in that period. Tanjong is historically a fundamental range-trading opportunity, and downside is limited at current levels.
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