Triyards Holdings

UOBKayhian on  11 Jul 2014

FY14F PE (x): 5.5
FY15F PE (x): 5.5
9MFY14 net profit of US$21.4m slightly ahead of our expectations. Triyards’ 3QFY14
net profit of US$6.3m ( -17% yoy) and 9MFY14 net profit of US$21.4m (+1% yoy) was
ahead of our expectations, accounting for 83% of our full-year forecasts. The higher
net profits were due to higher recognitions from Lewek Constellation and contributions
from three self-elevating units (SEU). These increases were partially offset by higher
revenue generated in 9MFY13 from one AHTS and two PSVs that were delivered
during that period.
Secures US$112m worth of two liftboat contracts, in discussions to secure additional 6-
8 contracts. Triyards announced that it has secured two liftboat contracts from
Southeast Asia-based players for US$112m, and include the maiden win for BH 300-
L4T, a four-legged liftboat equipped with leg lengths that exceed 90m (approximately
300ft), The second order is for a BH335 which is equipped with leg lengths that exceed
100m (approx. 335ft). In addition, the company is in various stages of negotiation to
secure another 6-8 liftboat contracts, with two of it in advanced stages from US-based
players who are trying to penetrate Asian liftboat markets. With the recent order wins,
Triyards’ orderbook stands nearly at US$240m (excluding US$25m worth remaining
recognitions from Lewek Constellation), this extending earnings visibility till FY16.
Maintain BUY with a target price of S$0.86, pegged at 1.0x FY15F P/B, which is at a
60% discount to the long-term 1-year forward P/B mean of 1.66x for the OSV-shipyard
segment of the offshore & marine sector. In our view, a P/B valuation methodology is
more appropriate than PE as Triyards’ current earnings do not reflect the potential of its
proprietary SEU designs. Our target price translates into a FY14/15F PE of 7.3x,
indicating the stock is currently trading at attractive valuations.