Triyards Holdings

UOBKayhian on 9 Jan 2015

FY14 PE (x): 4.2
FY15F PE (x): 3.4
Triyards bagged US$75m liftboat contracts from US-based operators in 1QFY15,
bringing its orderbook to some US350m. Management expects to secure another
US$150m worth of contracts from Ezion in the near term. We expect demand for
liftboats, which are mainly used in the servicing and maintenance of fixed platforms in
shallow waters, to remain relatively resilient despite the recent sharp drop in oil prices.
Maintain BUY. Target price: S$1.04.
No changes to our earnings estimate. We expect a net profit CAGR of 16% over the
next three years on the back of the higher contract wins (US$350m p.a.) and
contributions from the recent yard acquisition. Key risks to our earnings assumptions are
the lack of contract wins and order cancellations in light of the weak oil price
environment.
Maintain BUY with a lower target price of S$1.04 (from S$1.13), pegged at 1.0x FY16F
P/B (previously 7x FY16F PE). We believe it is prudent to use a P/B approach
(previously PE methodology) in light of the recent volatility in oil prices. At the current
share price levels, Triyards is trading at cheap valuations of 3.5x FY15F PE and 3.0x
FY16F PE.