ASL Marine

ASL Marine: 1QFY14 net profit improved 19% y/y to $11.7m, while revenue surged 67% to $148.3m. This was primarily due to a strong 138% improvement in shipbuilding segment of $103.1m, on higher progressive revenue recognition of OSVs and the recognition of a dredger. This was mitigated by lower shiprepair and conversion (-19%) and shipchartering (-22%) revenues. Overall gross profit margin dropped 8.6ppts to 16.2% due to the change in sales mix. Even with low order intake expectations, ASL’s order book of S$268m (owing to record orders it received in FY12) secures CIMB's FY14-15 earnings forecasts. Management cites that the outlook for the shipbuilding industry remains challenging due to over capacity and lower demand of ships, while margin remains weak due to the depressed pricing and rising labour costs. ASL Marine trades at 1QFY14 annualized P/E of 5.9x. Latest broker ratings as follows: CIMB maintains its Outperform rating and raised its TP to $0.90 from $0.86