Mermaid

Mermaid: CIMB maintains Add with $0.51 TP. House recently hosted a one-day non deal roadshow for Mermaid in Singapore. Given its long-term contracts and the emergence of a significant shareholder at the parent level, most investors believed that the company’s earnings are on the cusp of a strong turnaround. Trim FY14-15 EPS by 2-4% to account for the lower earnings of Mermaid’s tender rigs and maintain Add rating and target price, still based on 1x CY14 P/BV (its 3-year mean). The catalysts are the stronger subsea earnings and capex plan materialisation.