Triyards Holdings

UOBKayhian on 23 Oct 2014

FY14 PE (x): 5.7
FY15F PE (x): 4.7

Triyards’ FY14 results were in line with expectations. The recent earnings-accretive
acquisition of Strategic Marine’s yards will boost its yard capacity and expand its
product segment and client base. Demand for liftboats has picked up with Triyards in
negotiations for 10-12 liftboat contracts worth US$500m-600m. The stock is trading at a
relatively cheap 4.7x 2015F PE. Our small-cap top pick with a target price of S$1.13.
Our preferred OSV small-cap pick with a target price of S$1.13, based on 8x FY15F
PE, or a 15% premium to peers’ long-term mean of 7x, as we see strong earnings
growth potential from growing liftboat demand. The premium is justified, considering
Triyards being one of the very few Asian yards with an excellent track record of building
and delivering liftboats. The stock is currently trading at a cheap 4.7x FY15F PE,
providing huge upside potential.