Excerpts from UOB Kay Hian reports this morning.....
UOB Kay Hian says of Nam Cheong -- "A steady ship will stay its course"
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Reiterate OVERWEIGHT on small-cap oil service sector as we see more upside ahead.
- Top pick is Nam Cheong because of its proven business model.
Last price: S$0.225; Target Price: S$0.300
We like Nam Cheong as we believe its build-to-stock (BTS) business model allows it to take advantage of an upcycle.
The model means vessels are built first and sold later, when the vessels are closer to completion. So far, they have been successful with this model, achieving profitability every year even during the financial crisis.
Nam Cheong’s strength lies in three factors:
a) they can identify trends ahead of the market and therefore, can build vessels tailored to market requirements,
b) they focus on shallow water, mass-market products which are easily marketable and
c) their BTS model is attractive for customers as Nam Cheong undertakes the market risk for its customers until the vessel is sold.
Our target price is based on a 2013F PE of 9.7x, which is at a premium to its peers’.
Recent story: NAM CHEONG: Malaysia's no.1 OSV yard rides nation's transformation
Transcu: Starting a new chaper with new CEO
Transcu Group resumed trading this morning after a trading suspension since June last year as it was facing cash-flow problems and had incurred three consecutive years of losses.
Transcu has just announced a change of CEO.
Outgoing CEO Akihiko Matsumura will, however, remain on the Board and take on the role of Non-Executive Vice Chairman.
Incoming CEO, Mr Lawrence Rikio Komo, 53, is a veteran banker, bringing with him more than 20 years of leadership experience from multinational corporations and global banks.
He said: "Transcu is founded on great ideals to improve the quality of human life and we have the patents to proprietary technologies which are capable of achieving the goal.
"In the next phase, what is required is the execution excellence to bring these technologies to market and this is my utmost priority.
"Together with the management team, I believe we can navigate through this challenging period towards a brighter future.”
Click here for Transcu's press release.
UOB Kay Hian says dividend yield of GLOBAL PREMIUM HOTELS could be as high as 6%
Analyst: Brandon Ng, CFA
Global Premium Hotels (GPH) is currently trading at a 20% discount to its NAV/share of 30.7 cents and 6.1x 2011 PE.
Based on consensus, the stock is currently trading at 13.2x 2012F PE.
The group reported 1H12 net profit of S$10.0m (-7.1% yoy) as higher financing costs offset higher revenue and gross profit.
Revenue rose 19.6% yoy to S$30.1m as the group started operations in Parc Sovereign, Fragrance Hotel-Elegance and Fragrance Hotel-Riverside.
As it intends to pay out at least 80% of its net profit as dividends, dividend yield could be as high as 6%.
Recent story: GLOBAL PREMIUM HOTELS, AURIC PACIFIC, CORDLIFE: What analysts now say....
