Triyards

Triyards: 2QFY14 net profit climbed 9% to US$7.7m, while revenue fell 6% to US$74.5m. Gross margins improved 3ppt to 18% on higher contributions from ship repair projects and completion of one unit of turret during 2Q14. Finance expenses increased 80% to US$0.5m on higher bank loans. Demand for medium to large sized OSVs and SEUs is expected to remain healthy, and the group continues to enjoy a robust level of enquiries. That said, management is cautious on increased competition, especially from China. NAV at 28 Feb was US$0.5344, translating to ~1x P/B, while annualized 1HFY14 P/E was ~5x.