ASL Marine: Lackluster 1Q11 results largely in line with Kim Eng expectations but below market consensus. Net profit fell 32.2%YoY to $8.0m in tandem with the broad-based decline in rev across its 3 business segment (-30.6% yoy)….
Shipbuilding revenue plunged 31% yoy to $49m attributed to depleting order book which resulted in lesser number of projects undertaken during the period. Gross margin however, expanded to 9.2% in 1Q11 as group increased efficiency at its Batam’s yard….
Ship repair operations recorded lower turnover of $17.4m in 1Q11 (-37.9% yoy) given the lack of larger ship conversion works available in the market. Not surprisingly, gross margin of 18.2% remains subdued on the continued pricing pressure from other regional competitors…
Despite challenging outlook, grp has secured six shipbuilding orders worth about $29m, bringing net order book to $303m, comprising of 50 vessels, scheduled for deliveries up to 1Q CY12. Kim Eng maintains Buy with TP of $1.12, pegging it at an undemanding 1.0x FY11 NTA. Grp currently trades at undemanding valuations at 0.8x P/B vs peers average of 1.5x.
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