Mencast

Mencast: OSK-DMG maintains Buy with TP $0.76 (from $0.75), based on 12x core FY14e P/E. Continues to like Mencast for its strong growth outlook and strengthening presence in the O&G services industry in S’pore. While the latest FY13 results came in 10% below expectations, mgt still declared a dividend of 3¢ (1¢ final + 2¢ special), that raised yields to ~5%, reflecting mgt’s confidence in the company’s prospects. At the yard visit, OSK-DMG saw brand new machines for its precision engineering operations as well as new robotic welding machines that will allow one man to perform the function of five – a boost to productivity. Staff morale is high, a sign that workers are buying into mgt’s vision to become a global player. The offshore engineering segment remains the largest growth driver for FY14.