SBI Offshore

SBI Offshore: the usually thinly traded stock is +9.6% at $0.285 on strong volume today. The co may be seeing sudden investor interest after being featured at the recent OSK-DMG Asean Corporate Day held in Singapore. DMG also had a sales note yday. Highlights that SBI’s chairman and CEO Jonathan Hui recently sold 2m shares to the open market, representing 1.6% of the issued shares. The house believes the sale is not a signal of deteriorating fundamentals, but rather an attempt to enhance market liquidity. Views this as a positively move as poor free float has been a constant problem preventing investors from buying into the stock, despite the favorable prospects. Adds, since the group last announced publicly its order book of US$41m at the end of Feb, it had experienced robust new inquires. Believes that SBI’s OEM product lines, ranging from lifeboats to offshore cranes, have bagged US$1.5m to US$2m new orders each month. On top of that, channel checks also show that its existing customer Seadrill had recently committed to a new tender rig contract. Expects SBI to participate in the bidding process. The house reaffirms Buy with an unchanged TP of $0.34 based on 9.9x industry average FY12 P/E