Stock Name: PEC
Company Name: PEC LTD.
DBS Vickers Securities in an Aug 29 research report says: "PEC posted FY2011 headline PATMI of $32.1 million; excluding fair value gains on derivatives, core PATMI was $29.5 million, 19% below expectations.
"The variance was due mainly to JV/associates losses of $6.6 million arising from unsettled variation orders on the JV's Rotterdam project. A final and special dividend per share of 3.0 cents was declared. FY2012/2013 order wins kept at $300 million. We cut FY2012F by 9% on reduced maintenance margins; FY2013F is raised by 11%, on sustainable project margins of 26%.
"We peg PEC's target price of 90 cents on 7x FY12 PE, in line with its historical average (prev 6x PE plus net cash). Despite the support of its net cash of 62 cents per share, upside potential is also limited by the lack of visible catalysts, muted earnings growth, and limited visibility on order flows. DOWNGRADE TO HOLD.
Company Name: PEC LTD.
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 0.90 |
DBS Vickers Securities in an Aug 29 research report says: "PEC posted FY2011 headline PATMI of $32.1 million; excluding fair value gains on derivatives, core PATMI was $29.5 million, 19% below expectations.
"The variance was due mainly to JV/associates losses of $6.6 million arising from unsettled variation orders on the JV's Rotterdam project. A final and special dividend per share of 3.0 cents was declared. FY2012/2013 order wins kept at $300 million. We cut FY2012F by 9% on reduced maintenance margins; FY2013F is raised by 11%, on sustainable project margins of 26%.
"We peg PEC's target price of 90 cents on 7x FY12 PE, in line with its historical average (prev 6x PE plus net cash). Despite the support of its net cash of 62 cents per share, upside potential is also limited by the lack of visible catalysts, muted earnings growth, and limited visibility on order flows. DOWNGRADE TO HOLD.
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