DBS downgrades CH Offshore to hold

Stock Name: CH Offshore
Company Name: CH OFFSHORE LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.44

DBS Vickers downgraded marine service provider CH Offshore to ’hold’ from ’buy’ and cut its target price to $0.44 from $0.50, citing greater earnings risk as its high-value charters expire.

By 10:17 a.m., shares of CH Offshore were 1.2% lower at $0.415, and have gained 18.6% since the start of the year, compared to Thomson Reuters Asia Pacific and Russia Energy Index’s 4.8% fall.

Two of CH Offshore’s charters to Latin America, which accounted for 54% of its 2011 gross profit, have concluded their four-year terms and will not be extended, DBS said.

Although, the brokerage said, the anchor handling tug and supply vessels charter market had bottomed out and is recovering, current day rates are only 60-80% of previous peak levels.

As a result, DBS cut its 2013 profit forecast for CH Offshore by 22%.

 

CH Offshore upgraded to 'buy' by DBS

Stock Name: CH Offshore
Company Name: CH OFFSHORE LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.50

DBS Vickers Securities in a Mar 13 research report says: "We project CHO's recurring earnings to bottom out in FY2012F at US$28 million (-8% y-o-y) before recovering +22% y-o-y in FY2013F on higher fleet utilisation rate and improved margins from positive operating leverage. We introduce FY14F earnings at US$38 million (+9% y-o-y), mainly on higher day rates.

"CHO's recent interim DPS of 0.75 cents (stock now ex-div) is in line with 2Q11’s payout. Its strong net cash position of US$86.5 million/US$108.2 million (43%/53% of current market cap) by end FY2012/2013, up from US$36.4 million as of end 2Q12, is largely driven by a vessel disposal, strong operating cash flows and no major capex plans.

"We raise our target price to 50 cents (up from previous 43 cents), attractive 7.8% dividend yield and RNAV of 65 cents. UPGRADE TO BUY."

CH Offshore rated 'hold' by DBS

Stock Name: CH Offshore
Company Name: CH OFFSHORE LTD

Research House: DBS Vickers

Price Call: HOLD

Target Price: 0.43

DBS Vickers Securities in a Feb 2 research report says: "2Q12 recurring net profit of US$7.7 million (-8% y-o-y) was in line with expectations. Revenue was down 19% y-o-y to US$13.7 million on a smaller fleet, as CHO had disposed 3 vessels to its associate in FY2011 to comply with the Indonesian Cabotage Regulations.

"CHO's balance sheet remains robust, with a net cash position of US$36.4 million, or 6.6 cents per share, forming 17% of its market cap. An interim dividend per share of 75 cents was declared. We project CHO's core earnings to decline by another 9% y-o-y in FY2012F (FY ending June) before rebounding 27% y-o-y in FY2013F.

"Target price of 43 cents is maintained, pegged to 9x FY12F PE. Valuations are supported by a relatively attractive and sustainable dividend yield of 7.3% and estimated RNAV of 57 cents. MAINTAIN HOLD. "

CH Offshore downgraded to 'hold' by DBS

Stock Name: CH Offshore
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."

CH Offshore upgraded to 'buy' by DBS

Stock Name: CH Offshore
Company Name: CH OFFSHORE LTD

Research House: DBS Vickers

Price Call: BUY

Target Price: 0.49

DBS Vickers Securities in an Aug 24 research report says: "On the back of strong operating cash flows, CHO's net cash position of US$43.3 million at end FY2011 is equivalent to 21% of its current market cap.

"CHO has reverted to a dividend payout ratio more consistent with pre-FY2009, with a 47% payout in FY2011, or dividend per share of 2.75 cents, implying a yield of 7.6% at current price levels. We cut FY2012/2013F by 21%/15% on reduced day rate assumptions.

"CHO currently trades at 6.6x FY2012 PE and 0.88x FY2011 P/BV, close to -1.5SD from its historical average valuations. Our target price is reduced to 49 cents (prev 60 cents) in line with a lowered FY2012F and an adjusted USD/SGD exchange rate. UPGRADE TO BUY."