Stock Name: CH Offshore
Company Name: CH OFFSHORE LTD
DBS Vickers Securities in a Nov 8 research report says: "CHO's 1Q12 PATMI of US$6.4 million (-11% y-o-y) was below expectations. Revenue fell 14% y-o-y /7% q-o-q to US$12.3 million on a smaller fleet, as CHO had disposed 3 vessels to its associate in FY2011 to comply with the Indonesian Cabotage Regulations.
"Gross margins also weakened to 53.3% (-2.6ppt y-o-y), mainly on lower revenues against certain fixed overheads, while its SGD-denominated admin expenses rose to US$1.1 million (+41% y-o-y), largely on the back of a weaker USD/SGD, leading to overall earnings weakness. FY2012/2013F cut by 11%/4%.
"Our target price has been correspondingly reduced to 43 cents, still pegged to 9x FY12 PE. Current valuations are not rich (7.4x FY12PE, 0.8x P/BV) and should be supported by relatively attractive and sustainable dividend yield of 7.5% and estimated RNAV of 57 cents. DOWNGRADE TO HOLD."
Company Name: CH OFFSHORE LTD
| Research House: DBS Vickers | Price Call: HOLD | Target Price: 0.57 |
DBS Vickers Securities in a Nov 8 research report says: "CHO's 1Q12 PATMI of US$6.4 million (-11% y-o-y) was below expectations. Revenue fell 14% y-o-y /7% q-o-q to US$12.3 million on a smaller fleet, as CHO had disposed 3 vessels to its associate in FY2011 to comply with the Indonesian Cabotage Regulations.
"Gross margins also weakened to 53.3% (-2.6ppt y-o-y), mainly on lower revenues against certain fixed overheads, while its SGD-denominated admin expenses rose to US$1.1 million (+41% y-o-y), largely on the back of a weaker USD/SGD, leading to overall earnings weakness. FY2012/2013F cut by 11%/4%.
"Our target price has been correspondingly reduced to 43 cents, still pegged to 9x FY12 PE. Current valuations are not rich (7.4x FY12PE, 0.8x P/BV) and should be supported by relatively attractive and sustainable dividend yield of 7.5% and estimated RNAV of 57 cents. DOWNGRADE TO HOLD."
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