Vallianz

Vallianz: Announced a US$82m contract to provide charter and ship management services to a major offshore construction company. The vessels will be deployed in Latin America from 3QFY14 to FY15. Order book stands at US$524m. We reiterate that the net gearing of 4x is a key concern, coupled with a potential 7.9% share dilution from the conversion of remaining US$7.4m redeemable convertible capital securities. At $0.142, Vallianz trades at annualized 1Q14 P/E of 12.6x and 2.6x P/B compared to industry peer average of 14.7x P/E and 1.6x P/B. There is currently no research coverage on the stock.