With two yards in Vietnam and a fabrication facility in the US, Triyards Holdings Ltd (Triyards) is an engineering and fabrication solutions provider focused on the offshore oil and gas industry. Unlike many shipyards, the group has a strategic focus on the construction of self-elevating units (liftboats), having established a significant track record. Originating from Ezra Holdings which holds a 67% stake currently, Triyards may be able to be involved in some of the projects that Ezra undertakes and tap into Ezra’s clientele base. Trading at 6.7x FY13F EPS and 5.7x FY14F EPS, Triyards’s valuations are undemanding. Based on 8x FY13/14F earnings, we derive a fair value estimate of S$1.07. Initiate with BUY.
Engineering and fabrication solutions provider with strategic focus
With two yards in Vietnam and a fabrication facility in the US, Triyards Holdings Ltd (Triyards) is an engineering and fabrication solutions provider focused on the offshore oil and gas industry. Unlike many shipyards, the group has a strategic focus on the construction of self-elevating, self-propelled accommodation and construction units (liftboats), having established a significant track record. The group is well positioned to secure more orders for such units, which is gaining acceptance internationally due to increase recognition of its advantages over traditional work barges. Triyards also has the capability to build technologically advanced construction vessels (OSCV) and offshore support vessels (OSV).
Backing from the Ezra Group
Triyards originated from Ezra Holdings, which currently holds a 67.0% stake. Close links between both companies mean that Triyards may be able to be involved in some of the projects that Ezra undertakes and tap into Ezra’s clientele base.
Plans to expand product range and upgrade capabilities
Looking ahead, Triyards plans to focus on complex and sophisticated liftboats, OSCVs and OSVs while building up in-house engineering capabilities to commission its own designs of self-elevating units. The group also intends to diversify into new products and expand its ship repair business.
Initiate with BUY; valuations undemanding
Stocks of small-mid sized yards are trading at about 10.8x FY13F earnings and 8.2x FY14F earnings. Due to Triyards’s short operating history (since 2007), we use a PER of 8x (based on FY13/14F earnings), as we conservatively accord a ~15% discount from the industry average of 9.5x. This results in a fair value estimate of S$1.07. Initiate with BUY for a 29.7% upside potential.
With two yards in Vietnam and a fabrication facility in the US, Triyards Holdings Ltd (Triyards) is an engineering and fabrication solutions provider focused on the offshore oil and gas industry. Unlike many shipyards, the group has a strategic focus on the construction of self-elevating, self-propelled accommodation and construction units (liftboats), having established a significant track record. The group is well positioned to secure more orders for such units, which is gaining acceptance internationally due to increase recognition of its advantages over traditional work barges. Triyards also has the capability to build technologically advanced construction vessels (OSCV) and offshore support vessels (OSV).
Backing from the Ezra Group
Triyards originated from Ezra Holdings, which currently holds a 67.0% stake. Close links between both companies mean that Triyards may be able to be involved in some of the projects that Ezra undertakes and tap into Ezra’s clientele base.
Plans to expand product range and upgrade capabilities
Looking ahead, Triyards plans to focus on complex and sophisticated liftboats, OSCVs and OSVs while building up in-house engineering capabilities to commission its own designs of self-elevating units. The group also intends to diversify into new products and expand its ship repair business.
Initiate with BUY; valuations undemanding
Stocks of small-mid sized yards are trading at about 10.8x FY13F earnings and 8.2x FY14F earnings. Due to Triyards’s short operating history (since 2007), we use a PER of 8x (based on FY13/14F earnings), as we conservatively accord a ~15% discount from the industry average of 9.5x. This results in a fair value estimate of S$1.07. Initiate with BUY for a 29.7% upside potential.
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