Technics Oil & Gas

Technics Oil & Gas: announced that it will place 10.7m shares to Eversendai Crop at $1.05/sh. This brings Eversendai’s total share holdings to 40.3m, or 18.0% of enlarged share capital. Eversendai now needs to purchase another 4.6m on the open mkt to begin equity acctg their new associate and to likely acquire a board seat. DMG observes this placement was done at a 2% premium to the previous day’s avg trading price, bucking the recent trend of placements at discounts; believes this points to Eversendai’s confidence in Technics’ prospects and attractive valuation. The house maintains its Buy rating with a lowered TP of $1.15 (adjusted for dilution from the new placement), pegging to 12x FY13e EPS. Continues to like Technics for its steady growth (9% EPS CAGR to FY15e), high returns (ROE 32%, ROIC 37% in FY13e) and high div yield (5.8%).