STX OSV: CIMB initiates coverage with an Outperform rating and TPof $1.60, based on 11x CY12 P/E (10% discount to 5-year rigbuilders’ mean). Note that grp is a designer and shipbuilder of high-end, customised offshore support vessels. With nine shipyards in four countries, it has exposure to global E&P spending….
Highlight that stock is trading at 8x CY12 PE, in line with local OSV builders’ 5-yr trading average. Argue that closer comparables should be rigbuilders, KepCorp and SMM, which are trading above their 5-year P/E mean valuations….
Broker believes that STX OSV, as the only other mid-cap investment apart from Ezra, that is the next most-valued proxy for the global E&P recovery. Sees potential stock catalysts fromhigher-than-expected orders and results.
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