What brokers are saying .... DBS VICKERS Securities says … EZION HOLDING | BUY | TP: 2.65 Ezion’s 3Q13 net profit surged 137% y-o-y and 5% q-o-q to US$38.2m, bringing 9M13 net profit to US$102.9m, or 73% and 77% of our and consensus’ FY13 estimates Growth was driven by fleet expansion, commencement of three LNG projects at Curtis Island and margin improvement We are impressed with the 1.9ppt q-o-q gross margin expansion to 48.2%, though impact on the bottomline was partially offset by lower JV and other income Net gearing is manageable at 1.05x as of end Sept Ezion took delivery of two service rigs - for deployment in Myanmar and Mexico in 3Q - and three more units are expected to come onstream by end Dec (for Caspian Sea, India and Middle East), bringing its total fleet to 18 vessels (double that of 9 in early 2013) Management indicated during the briefing that 3 liftboats and 1 refurbished jackup rig are experiencing delays of 3-6 months due to external factors In addition, service rig #11 will be off hire for about 5 months for an upgrade requested by customer We have adjusted our revenue recognition accordingly Nonetheless, after factoring positive impact from higher margins, lower tax and interest expense, our FY14/15F EPS are lifted marginally by 3.0%/1.6% BUY, TP adjusted to S$2.65, based on 14x revised FY13/14F EPS Current valuation is undemanding and we believe Ezion’s strong earnings growth (2-year CAGR of 42% in FY13-15) and contract wins will drive the stock price further Maintain BUY UOB KAY HIAN says … GENTING HONG KONG | BUY | TP: US$0.49 Alliance Global’s (AGI) 3Q13 teleconference call confirmed that Resorts World Manila’s (RWM) lower-than-expected results stemmed from a poor run of luck Blended hold in 3Q13 fell to a record low against its historical range of around 3.8-5.9% , masking very healthy VIP volumes, consistent with the 82% yoy surge in promotional allowances (which includes rolling chip volume commissions) Mass market drop momentum held steady RWM, a 45% associate of GENHK, had posted a 3Q13 EBITDA and net profit of US$45m and US$29m respectively (9M13 EBITDA and net profit stood at US$155m and US$85m respectively We trim our 2013 EBITDA forecasts for RWM by about 5.6% to US$240m, after accounting for the poor run in 3Q13, and assuming recovery in blended hold and sustained volume growth going into the seasonally strong 4Q13 RWM is now expected to account for 35% of GENHK’s adjusted net profit GENHK’s valuations are undemanding at current levels, having retreated 12% from the recent peak A key catalyst would be a likely sharp earnings recovery in the seasonally strong 4Q13 Our target price of US$0.49, which is based on a 10% discount to our assessed SOTP, implies a target 2014F adjusted EV/EBITDA of 10.2x (the discount to SOTP widens to 30% if the SOTP incorporates its listed associates’ market prices) We trim our 2013 EBITDA forecasts for RWM by 5.6%, after accounting for the poor run in 3Q13, but assuming blended hold will recover in 4Q13 and that VIP volumes will sustain Nothwithstanding the strong VIP volume growth and sustained mass market growth, we are still mindful over its growth outlook going into 2014 as RWM will contend with the opening of Melco Crown Philippines’ casino, and noting Bloomberry’s impressive mass market player sign-ups in 3Q13 The downward revision at RWM lowers our GENHK net profit forecasts by 3.7% in 2013, and we also lower our 2014-15 forecasts by 2.8% and 2.4% respectively, adjusting for the dilution of GENHK’s stake in RWM post-IPO While RMW was not directly impacted by the recent Typhoon Haiyan, we note that adverse weather (ie flooding) had previously resulted in several days of dampened visitation That said, from GENHK’s perspective, the adverse weather has directly impacted Star Cruises, prompting the cancellation of some five sailings and adjustments to itineraries to 16 others since the start of 2H13 Notwithstanding our downward earnings revision, we reckon GENHK’s valuations are undemanding at current levels Share price has retreated by 12% from its recent peak to US$0.415 following the disappointing reception to RWM’s IPO and as investors have generally turned cautious on the Philippines We reckon this presents a trading opportunity ahead of the seasonally strong December earnings However, in the longer term, we remain cautious of rising competition However, upside to GENHK’s shares is capped due to long-term concerns – mushrooming competition in Manila’s integrated casino space, and a potentially long payback period for its recently-commissioned new vessel for Asia, which will also be its largest (a 150,000 tonne, 1,682-berth vessel costing €707m), slated for delivery late-2016 OCBC Securities says… MIDAS HOLDINGS | BUY | TP: S$0.67 Midas Holdings’ 3Q13 results exceeded our expectations, with revenue jumping 48.5% YoY to CNY301.0m, or 15.8% above our forecast Gross margin of 20.8% (-10.7 ppt YoY) disappointed due to a change in product mix as more aluminium extrusion profile deliveries were made to the lower margin freight wagons, while there was also an increase in per unit production cost Nevertheless, bottomline reversed from a CNY6.1m net loss in 3Q12 to a PATMI of CNY16.4m and beat our projection of CNY13.3m This was attributed largely to a share of profit of CNY10.9m from its 32.5%-owned associated company Nanjing SR Puzhen Rail Transport (NPRT) as more train cars were delivered, versus a share of loss of CNY7.0m in 3Q12. For 9M13, revenue and PATMI increased by 20.6% and 145.6% to CNY787.5m and CNY26.4m, respectively Current order book stands at CNY900m for Midas and CNY8.5b for NPR Midas recently clinched CNY167.5m of contracts to supply aluminium alloy extrusion profiles for the manufacture of high-speed railway (HSR) train cars on 21 Oct this year We expect the bulk of this contribution to be booked in 4Q13, with the remainder in 1Q14 due to tight delivery schedules from its customers Meanwhile, the China Railway Corporation (CRC) recently opened the second round of HSR train car tenders on 7 Nov This involves a total of 258 train car sets, of which 78 are of 250km/h speed and 180 are of 350km/h speed (higher value) We believe the potential market size for aluminium alloy extrusion profile suppliers may amount to ~CNY715.5m Midas could possibly secure ~CNY325-380m of contracts from its customers from this procurement exercise in late Dec or early Jan next year, based on our estimates We raise our FY13 revenue and PATMI forecast by 11.0% and 27.0%, respectively While our projection for Midas’ FY14 revenue is bumped up by 9.7%, we keep our earnings estimate intact due to a lower gross margin assumption Rolling forward our valuations to 1.3x FY14F P/B, we increase our fair value estimate marginally from S$0.65 to S$0.67
Posted on: Tue, 19 Nov 2013 04:19:08 +0000
Trending Topics
Recently Viewed Topics
© 2015