Civmec

Civmec: hosted analysts visit to its facilities in Henderson, Perth, Western Australia last week. Civmec claims it has the largest under-cover sea-front fabrication and modular assembly workshop in Australia, enabling the group to fabricate large integrated and modularized structures undisrupted by weather conditions, allowing it to secure contracts of higher values. The group intends to acquire additional production facilities and equipment so as to increase its capacities in Structural, Mechanical and Piping (SMP) installation and its site civil works divisions. A new 6,000+ sqm corporate office is also slated for completion in 1Q13. OCBC compares Civmec against a broad segment of construction and infrastructure companies based in Australia. Says the co appears to be growing at a very fast pace, with an estimated 3-year EPS growth of 205%. However, this can be partially attributed to a low base effect. Looking forward, OCBC believes the rapid growth may continue as the group utilises its IPO proceeds in expanding its workforce and growing its SMP business. Adds, valuation seems reasonable with a forward P/E of 14.1x, though the house noes not have a rating on the stock.