Kreuz

Kreuz: OSK-DMG initiates at Buy with TP $1.14, based on 10x blended FY13e/14e P/E, and backed by a $2.05 DCF value. Sees strong potential for Kreuz share price to double within the next three years. Notes Kreuz is a fast growing subsea services provider with very strong margins (30% EBITDA / 20% net margins), as demand for subsea work - buoyed by sustainable high oil prices - has exceeded the group's limited capacity, allowing thegroup now to cherry pick contracts. The house sees highly visible medium - term growth as its capacity is set to more than double by FY16e. Believes given Kreuz's very low 6% net gearing and strong cashflow, Kreuz is attractively priced at 7.1x FY13e P/E and 19% growth.