Triyards Holdings reported an 18% YoY fall in revenue to US$61.1m and a 34% drop in net profit to US$5.1m in 2QFY15, such that 1HFY15 net profit of US$13.3m accounted for 49% of our full year estimate; but still in line with expectations. Following new order wins that were announced in Jan and Mar this year, the group also announced last evening new contracts worth about US$100m, bringing new order wins since the start of this year to US$275m vs. US$170m for CY14. On the balance sheet front, net gearing remains healthy at 0.4x. Oil and gas counters are trading at depressed valuations and we lower our P/E from 6x to 5x, but we increase our FY16 earnings by ~25% with the group’s recent order wins. As such, our fair value estimate slips from S$0.65 to S$0.60, but given the upside potential of ~56%, we maintain our BUY rating on the stock.
2QFY15 results in line
Triyards Holdings reported an 18% YoY fall in revenue to US$61.1m and a 34% drop in net profit to US$5.1m in 2QFY15, such that 1HFY15 net profit of US$13.3m accounted for 49% of our full year estimate; but still in line with expectations. Gross profit margin was 22.4% in the quarter, comparable to 1QFY15, and higher than the 18.1% seen in 2QFY14. The newly-acquired Strategic Marine had its numbers consolidated with the group’s since mid Oct last year, and we estimate that the impact was ~US$20m in the topline and less than a million for the bottom-line.
Clinches US$100m of new orders; YTD wins US$275m
Following new order wins that were announced in Jan and Mar this year, the group announced last evening new contracts worth about US$100m comprising a liftboat, a high speed aluminium craft project and a fabrication project. This brings new order wins since the start of this year to US$275m vs. US$170m for CY14.
Upcoming tender pipeline
Besides small tenders (US$10-15m) whose results will be coming up in May, there is a possibility that the group may win more projects from Ezion. Triyards has also been receiving more enquiries relating to Diving Support Vessels, and the price range is US$120-160m for a larger vessel and US$60-80m for a smaller one. Finally, there is also the potential for another one to two liftboats in the horizon. Including the backlog of Strategic Marine (~US$50m), the group’s net order book stood at about US$370m as at end Feb, of which about 60% should be recognised in the next two quarters.
A cheap stock for a decent company
On the balance-sheet front, net gearing remains healthy at 0.4x. Oil and gas counters are trading at depressed valuations and we lower our P/E from 6x to 5x, but we increase our FY16 earnings by ~25% with the group’s recent order wins. As such, our fair value estimate slips from S$0.65 to S$0.60, but given the upside potential of ~56%, we maintain our BUY rating on the stock.
Triyards Holdings reported an 18% YoY fall in revenue to US$61.1m and a 34% drop in net profit to US$5.1m in 2QFY15, such that 1HFY15 net profit of US$13.3m accounted for 49% of our full year estimate; but still in line with expectations. Gross profit margin was 22.4% in the quarter, comparable to 1QFY15, and higher than the 18.1% seen in 2QFY14. The newly-acquired Strategic Marine had its numbers consolidated with the group’s since mid Oct last year, and we estimate that the impact was ~US$20m in the topline and less than a million for the bottom-line.
Clinches US$100m of new orders; YTD wins US$275m
Following new order wins that were announced in Jan and Mar this year, the group announced last evening new contracts worth about US$100m comprising a liftboat, a high speed aluminium craft project and a fabrication project. This brings new order wins since the start of this year to US$275m vs. US$170m for CY14.
Upcoming tender pipeline
Besides small tenders (US$10-15m) whose results will be coming up in May, there is a possibility that the group may win more projects from Ezion. Triyards has also been receiving more enquiries relating to Diving Support Vessels, and the price range is US$120-160m for a larger vessel and US$60-80m for a smaller one. Finally, there is also the potential for another one to two liftboats in the horizon. Including the backlog of Strategic Marine (~US$50m), the group’s net order book stood at about US$370m as at end Feb, of which about 60% should be recognised in the next two quarters.
A cheap stock for a decent company
On the balance-sheet front, net gearing remains healthy at 0.4x. Oil and gas counters are trading at depressed valuations and we lower our P/E from 6x to 5x, but we increase our FY16 earnings by ~25% with the group’s recent order wins. As such, our fair value estimate slips from S$0.65 to S$0.60, but given the upside potential of ~56%, we maintain our BUY rating on the stock.
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