Stock Name: Swiber
Company Name: SWIBER HOLDINGS LIMITED
Market Pulse: Swiber (24 Aug 2011)
FOCUS
Swiber Holdings: Kreuz secures US$25m contract with option
Summary: Swiber Holdings (Swiber) announced that its 63.17%-owned unit, Kreuz Holdings, has secured a US$25m contract with a US$10m option from a leading offshore construction company in the Middle East. Swiber will be utilizing its in-house fleet of vessels to perform the full spectrum of projects comprising subsea installation works. Swiber has clinched new orders worth US$432m YTD, helped by its enlarged vessel fleet and growing capabilities. However, it has disappointed the market with its core earnings and along with weaker market sentiment, its share price has fallen such that the stock is now trading at about 0.6x P/B, close to its 2009 low of 0.3x book. Net debt-to-shareholder equity has also risen from 0.95 in 1Q09 to 1.17 in 2Q11. Companies with relatively high leverage are generally more vulnerable in an environment with increasing macroeconomic risks and market volatility, and we lower our peg from 11x to 10x blended FY11/12F core earnings, reducing our fair value estimate to S$0.51 (prev. S$0.56). Maintain HOLD. (Low Pei Han)
For more information on the above, visit www.ocbcresearch.comfor detailed report.
NEWS HEADLINES
- China factory sector slowed down for a second consecutive month in August on the back of sluggish overseas demand, HSBC's China Flash PMI showed.
- Spot gold rose to an unprecedented US$1,900 an ounce before falling back to US$1,877 yesterday.
- Singapore's inflation for July was 5.4%, higher than the consensus estimate of 5%, mainly due to jumps in housing and transport costs. On a seasonally adjusted basis, CPI rose 0.6% MoM from June's 0.4%.
- The chief executive of Asia Environment (AsiaEnv) has launched a bid to privatize the company through a special purpose vehicle called Ciena Enterprises (Ciena). For every AsiaEnv share that it does not own, Ciena is offering 30 cents in cash or one share in Ciena.
- United Envirotech has received in-principle approval from SGX to list up to 305m new shares for its proposed US$113.8m convertible bond issue in the event of conversion.
- Lippo Group, the controlling shareholder of OUE, has unwound a derivative trade that is said to have possibly caused market confusion over the share price of OUE.
- Technics Oil and Gas announced yesterday that it has secured two contracts worth a total of S$8.5m.
Company Name: SWIBER HOLDINGS LIMITED
| Research House: OCBC | Price Call: HOLD | Target Price: 0.51 |
Market Pulse: Swiber (24 Aug 2011)
FOCUS
Swiber Holdings: Kreuz secures US$25m contract with option
Summary: Swiber Holdings (Swiber) announced that its 63.17%-owned unit, Kreuz Holdings, has secured a US$25m contract with a US$10m option from a leading offshore construction company in the Middle East. Swiber will be utilizing its in-house fleet of vessels to perform the full spectrum of projects comprising subsea installation works. Swiber has clinched new orders worth US$432m YTD, helped by its enlarged vessel fleet and growing capabilities. However, it has disappointed the market with its core earnings and along with weaker market sentiment, its share price has fallen such that the stock is now trading at about 0.6x P/B, close to its 2009 low of 0.3x book. Net debt-to-shareholder equity has also risen from 0.95 in 1Q09 to 1.17 in 2Q11. Companies with relatively high leverage are generally more vulnerable in an environment with increasing macroeconomic risks and market volatility, and we lower our peg from 11x to 10x blended FY11/12F core earnings, reducing our fair value estimate to S$0.51 (prev. S$0.56). Maintain HOLD. (Low Pei Han)
For more information on the above, visit www.ocbcresearch.comfor detailed report.
NEWS HEADLINES
- China factory sector slowed down for a second consecutive month in August on the back of sluggish overseas demand, HSBC's China Flash PMI showed.
- Spot gold rose to an unprecedented US$1,900 an ounce before falling back to US$1,877 yesterday.
- Singapore's inflation for July was 5.4%, higher than the consensus estimate of 5%, mainly due to jumps in housing and transport costs. On a seasonally adjusted basis, CPI rose 0.6% MoM from June's 0.4%.
- The chief executive of Asia Environment (AsiaEnv) has launched a bid to privatize the company through a special purpose vehicle called Ciena Enterprises (Ciena). For every AsiaEnv share that it does not own, Ciena is offering 30 cents in cash or one share in Ciena.
- United Envirotech has received in-principle approval from SGX to list up to 305m new shares for its proposed US$113.8m convertible bond issue in the event of conversion.
- Lippo Group, the controlling shareholder of OUE, has unwound a derivative trade that is said to have possibly caused market confusion over the share price of OUE.
- Technics Oil and Gas announced yesterday that it has secured two contracts worth a total of S$8.5m.
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