Technics O&G

Technics O&G: Good set of results with total div of 8c proposed. 3Q Rev at $39.5m +13.5% yoy -20.6% qoq. Net profit at $7.5m +0.8% yoy +24.3% qoq. Revenue growth yoy was attributed to recognition of EPCC projects which also commanded a higher profit margin. Net gearing is approx 12.6% EPS was approx 3.6c. Total dividend declared of 8c (5c interim, 3c special) Co still has outstanding orderbook of approx $85.0m. Co anticipates better performance for FY2012 given current orderbook, yard schedules and expected completion of yard space and facilities early nxt yr. Co trades at 9M12 annualized P/E is approx 11.3x. DMG maintains BUY, TP:$1.28. House note that 3QFY12 net profitrose +1% YoY, +24% QoQ to S$7.5m. 9MFY12 net profit of $17.8m (+11% YoY) was above expectation and accounted for 86% of estimates. Thestrong results were driven by stronger gross profit margin of 47.6% and S$1.78m gain from disposal of vessel. Excluding the disposal gain, recurringearnings still made up 78% of our estimate. Management also declared aninterim dividend of 8.0S¢, in-line with expectations. This translates intoa net yield of 7.9%. As revenue and margins can be lumpy, house keep earnings estimates unchanged. Maintain BUY with a TP of $1.28 pegged to12x blended FY12/13F EPS. See re-rating catalysts from positive earningsmomentum, new order wins, and listing of its subsidiary, Norr Offshore Group, in 1H2013.