TAS Offshore

[winston]

not vested

RHB favours TAS Offshore for its healthy order book
24 OCTOBER 2014

RHB Research has lowered TAS Offshore Bhd’s net profit forecast for the financial year ending 2016 by five to 11 per cent by assuming lower margins.

However, the research firm has kept its “buy” call on TAS Offshore, with a target price of RM1.42, as it favours the group for its growing demand for offshore support vessels in the oil and gas sector, coupled with a healthy order book.

“We have also revised down our target price to RM1.42, pegged to an unchanged FY15F price earnings of 9.5 times. This is still at a 35 per cent discount from its four-year average price/earnings of 15 times, which implies a low three-year average price earnings to growth of 0.23 times,” RHB Research said in its note to investors.

The firm added that TAS Offshore’s first quarter FY15 revenue came in at 24 per cent of its full-year target and bottom line was at 18 per cent of its FY15 estimate.

Meanwhile, the firm pointed that TAS Offshore had entered into joint-venture agreement with Chan Baihang last month to fund its build-to-stock (BTS) vessels.

“The company said the BTS model requires intensive investments in capital and that the joint-venture would allow TAS Offshore to achieve this objective while minimising the exposure risks in this operation.

“Currently, TAS Offshore is building six more offshore support vessels, which are to be delivered by next year,” it added.

Source: NST