Company Name: KREUZ HOLDINGS LIMITED
| Research House: DBS Vickers | Price Call: BUY | Target Price: 0.43 |
DBS Vickers initiated coverage of Singapore offshore marine services provider Kreuz Holdings with a ‘buy’ rating, citing attractive valuations and a positive outlook for order flow.
Kreuz shares were up around 2% at $0.26, outperforming the FT ST Small Cap Index which was down 1.7%. Kreuz shares have fallen nearly 19% so far this year, compared to a 4% rise in the index.
DBS said its target price of $0.43 is pegged at six times Kreuz’s 2012 fiscal year earnings, which it said is at a “conservative” 10% discount to the firm’s Singapore-listed small-cap offshore services peers.
The buoyant offshore market is likely to drive good order flows for Kreuz, leading to a compound annual growth rate of 15% for 2011-2013 fiscal year net profit, said DBS, adding that catalysts should come from new order wins in the near term.
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