UOB-KH starts Triyards at Buy, $1.11 target

Stock Name: Triyards
Company Name: TRIYARDS HOLDINGS LIMITED

Research House: UOB KayHian

Price Call: BUY

Target Price: 1.11

UOB KayHian starts Triyards at Buy with a $1.11 target. "We see Triyards as a proxy to the growing acceptance of liftboats internationally as it is one of the few yards outside the US capable of building such vessels."

It estimates the markets in Southeast Asia, the Mideast and West Africa will be able to absorb 30-50 additional liftboats over the next two to three years. It expects Triyards to see further growth by developing proprietary third-generation liftboat designs, expanding its ship-repair capacity, diversifying into new products such as aluminum shipbuilding and growing its equipment business and branding.

It also expects Triyards to continue to get shipbuilding and repair contracts from 67%-owner Ezra. UOB-KH estimates 2012-15 core net profit CAGR of 18.7%, excluding the contribution from the Constellation, a US$420 million ($519.5 million) construction vessel, which will comprise 17% of FY14 net profit.