Maybank-Kim Eng starts Swiber at Buy with $0.82 target. “We expect EPS to grow at a CAGR of 18% over FY12-14F, supported by recognition of its US$1.4 billion ($1.7 billion) offshore construction orderbook and sturdy contract win momentum. Swiber is establishing a stronger presence in the offshore construction space, garnering a clientele of international oil and gas players and is thus in a sweet spot to ride the offshore oil and gas upcycle.”
Swiber’s strong contract wins are an early testament to its fleet-expansion plans’ success and a reflection of the robust contract-award environment, it says, noting its more than US$1.7 billion year-to-date contract wins vs 2011’s US$733 million, with Swiber saying it expects an even better 2013 bidding environment.
Maybank-KE notes an overhang from Swiber’s high gearing of 1.0x at 9M12 due to capex for fleet expansion, but it expects the gearing to trend down to 0.8x by end-FY12. It says the stock is a relative laggard, trading at only 5.8x FY13 PER and 0.6x P/B, with downside limited. The stock is up 2.5% at $0.61.
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