Excerpts from analyst's report

Maybank Kim Eng raises target price of Sarin Technologies

Analyst: YEAK Chee Keong, CFA

300_4daniel_gilnertDaniel Glinert, chairman, Sarin Technologies.
NextInsight file photo 
Sequentially weaker 3Q13 as anticipated. 3Q13 net profit of USD3.1m (-63% QoQ) was a function of weaker revenue of USD17.3m (-22% QoQ) and a one-time tax charge of USD2.6m.

The 3Q13 performance was affected by a slowdown in the Indian diamond manufacturing sector, which was hit by:

(1) weakened INR,
(2) tightened credit conditions, and
(3) margin squeeze for manufacturers on high rough diamond prices.

TP raised to SGD2.16, reiterate Buy. Sarin’s stock price has appreciated by 17% since 2Q13 results despite weaker guidance for 3Q13.

We still see a strong long-term investment case for Sarin. We see potential earnings kicker from its new product launches, implying room for positive earnings surprises.

We raise our TP to SGD2.16, based on 15x FY14 PER (previously 13x).

We believe that our valuation is fair considering its 31% EPS CAGR and high ROEs of 40-50% over FY13-15. In comparison, diamond miners and retailers trade at average PERs of 14x and 26x respectively. Reiterate Buy.

Previous story: SARIN TECHNOLOGIES: Banking On A Revolutionary New Product

, a leading full service integrator of compression systems and process modules for the global offshore oil and gas sector, said that its 40.21% associate company Norr Offshore Group's subsidiary – Norr Systems Hydraulics  has been awarded its 1st Micro LNG plant.

robin_office1Robin Ting, executive chairman of Technics Oil & Gas. NextInsight file photoWorth S$21 million, the contract is for the supply of process 
equipments and accessories for Indonesia. 
Despite strong competition from other international competitors, the company was eventually selected due to its excellent technical proposal, experience and proven track record in the related field. 
“The Group has been consistently securing contracts so far and we are pleased that this momentum in order flow continues. Given our recent successes in EPCC and CE projects in several countries in the region, we are witnessing higher interest level and support from large multi-national corporations while we maintain strong ties with key customers,” said Robin Ting, Executive Chairman & Group MD of Technics.
This contract is not expected to have a positive material impact on the earnings per share for the financial year ending September 2014. 

Recent story: 
TECHNICS OIL & GAS Secures financing for new leasing business

UOB Kay Hian's picks for Nov 2013:


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