Ausgroup kept at 'neutral' with 28 cents target price by OSK DMG

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED

Research House: OSK-DMG

Price Call: HOLD

Target Price: 0.28

SINGAPORE (Feb 11): DMG & Partners Research is maintaining its "neutral" call on Ausgroup with target price of 28 cents.

In a report out today by analysts Lee Yue Jer and Jesalyn Wong, DMG says it has been another disappointing quarter for the marine, oil & gas and mining services company.

In 1H15, Ausgroup's PATMI met only 25% of DMG's original FY15 earnings forecast.

AusGroup upgraded to "neutral", target cut to 36 cents by OSK-DMG

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED

Research House: OSK-DMG

Price Call: HOLD

Target Price: 0.36

AusGroup upgraded to "neutral", target cut to 36 cents by OSK-DMG

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More details about AusGroup relisting on ASX from OSK-DMG

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED

Research House: OSK

Price Call: BUY

Target Price: 0.66

AusGroup has revealed the details of the next key step towards its relisting onto the ASX. The RTO companies will be Kebun Sedenak Sdn Bhd and Tropik Sentosa Sdn Bhd (Target Group), whose assets include freehold land and a golf resort in Malaysia. "As insufficient information was disclosed, our valuation of $0.66 is for AusGroup only, and we leave as potential upside any incremental value arising from the RTO," says OSK DMG in a note.

The Target Group owns about 1,015 acres of freehold land in Iskandar Malaysia and intends to acquire another 47 acres for a total of 1,062 acres. They also own The Legends Golf & Country Resort, which is a master-planned resort comprising one 18-hole Jack Nicklaus-designed championship course, one 9-hole Arnold Palmer-designed course and other assets. The main business of the Target Group after the RTO will be property development and management.

The Target Group’s shareholders include the Oh family which owns The Legends Fort Canning Park, Hotel Fort Canning, and is linked to the Eng Wah Global Group. Another big name is The New World Group from Hong Kong, a conglomerate with HK$311 billion in assets.

The ASX listing will i) offer AusGroup additional currency to pursue M&A opportunities in Australia, ii) improve its access to funds and banking arrangements being listed in a market with investors familiar with its operating environment, iii) increase its profile and enlarge its client base in Australia, and iv) increase its currency to retain staff via share schemes. As such, we see continued impetus for management to complete this relisting process.

After current shareholders receive distributions in specie of the ASX-listed Austco shares, the SGX-listed AusGroup will contain only Target Group assets. "Without sufficient information to fair-value these assets, we leave as potential upside any incremental value from the land and golf resort, and maintain our BUY on AusGroup at a TP of $0.66," says OSK DMG.

DMG starts AusGroup with 'buy' rating

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED

Research House: DMG

Price Call: BUY

Target Price: 0.75

DMG & Partners initiated coverage of AusGroup, which provides services to the mining and oil and gas industries, with a ‘buy’ rating and a target price of $0.755, citing a positive industry outlook.

By 10:10 a.m., AusGroup shares were up 2% at $0.505, and have surged 60% since the start of the year, compared to the FTSE ST Industrials Index's 20.5% rise.

A record A$261 billion ($333 billion) has been committed towards capital expenditure in 98 major minerals and energy projects between 2012 and 2016 in Australia, DMG said, which will benefit AusGroup.

The brokerage expects AusGroup to see net profit growth of 29% on an average a year over the next three years, helped by improving net margins.

The company also said it was planning to spin off its operating subsidiaries in a listed entity on the Australian Securities Exchange.

“If this plan goes through, AusGroup shareholders stand to gain as the industry average forward price-to-earnings on the ASX is 10 times versus AusGroup’s 5.4 times today,” said DMG.

DMG starts Ausgroup At Buy, Target $0.755

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED

Research House: DMG

Price Call: BUY

Target Price: 0.755

DMG & Partners initiates AusGroup at Buy with $0.755 target.

“AusGroup has effected a turnaround that has gone unnoticed by the market,” it says, estimating it trades at 6.6x historical and 4.9x forward P/Es. DMG forecasts 29% net profit CAGR for the next three years, noting fiscal-FY12 net profit of A$23.3 million ($29.8 million) was its highest ever.

“With a strong earnings growth profile, AusGroup joins our top picks with a high potential to double in two years.” DMG notes its forecasts are based on conservative FY13-15 net margin estimates of 4.3%-5.2%, compared with AusGroup’s price target increase to 6%-7%; it notes net margins have improved over the last four quarters. It says the industry backdrop is strong, with a record A$261 billion committed to capex for 98 major mineral and energy projects between 2012-2016, with another A$243 billion in uncommitted capex for 295 potential projects.

It notes its target price is based on 9X FY13 EPS, undemanding compared with Civmec’s 19x P/E. “We expect both the earnings growth and multiples re-rating to drive a massive share price outperformance.” The stock is up 20.7% at $0.495.

Ausgroup rated 'underperform' by CIMB

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED
Research House: CIMB

CIMB in a Feb 14 research report says: "2Q11 net profit of A$3.1 million (-9% y-o-y) was within our expectations. 1H11 net profit of A$5.1 million forms 53% of our full-year numbers. Revenue jumped 88% y-o-y to A$161 million due to milestone recognition, as several projects reached peak phases. Gross margins of 9.0% remain depressed.

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AusGroup - AusGroup target cut to $0.40 from $0.47 by CIMB

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED
Research House: CIMB

CIMB cuts AusGroup (5GJ.SG) target price to $0.40 from $0.47, based on 8.5x FY11 P/E, after reducing FY11-12 earnings estimates by 12%-19% to factor in lower gross margin, higher operating expenditure assumptions, according to Dow Jones.



CIMB says margins in fiscal 4Q10 ended June disappointing due to loss of construction contract. Expects order flows to remain weak, improve only from fiscal 2H11.



Research house keeps Underperform call, citing limited catalysts near term. AusGroup provides construction services to companies involved in development of natural resources. Shares off 1.0% at $0.48.

AusGroup - Ausgroup cut to Underperform from Neutral by CIMB

Stock Name: AusGroup
Company Name: AUSGROUP LIMITED
Research House: CIMB

CIMB downgrades Ausgroup (5GJ.SG) to Underperform from Neutral, cuts target to $0.47 vs $0.61 on 4Q loss guidance vs profit expected earlier after expected impairment charge for Singapore subsidiary Cactus Engineering, says Dow Jones.



CIMB also cuts FY10 reported profit forecast to A$8.4 million ($10.4 million) vs A$10.5 million, but excluding one-off loss maintains FY10, FY12 EPS estimates at $0.026, $0.067, respectively.

“At this juncture, we believe that Ausgroup will only secure significant order wins from the mega LNG projects from FY2012, despite its purer exposure to the Australian LNG sector,” says CIMB.



Sees “de-rating catalysts” from continued margin pressure, lower-than-expected order book replenishment. Stock last down 3.9% at $0.490.