Vard

Vard - Has seen a recent streak of contract wins, with the shipbuilder bagging its fifth contract for the quarter. The NOK800m contract is to design and construct an offshore construction and anchor handling vessel for Rem Offshore, and is valued at ~NOK 800m with delivery scheduled in 1Q16 from Norway. This latest order takes Vard’s year-to-date order wins to ~NOK8.5b and its order book to ~NOK23.5b, stretching its delivery schedule into 2016. Maybank-KE believes that Vard is on track for margin recovery as the cost overrun issues at its Niteroi yard in Brazil are resolved, and while the new Promar yard in Brazil may face initial start-up problems, these are likely to be manageable. Thereis however mixed views on the street for the counter, with a foreign broker recently raising its TP to $1.45 and adding it to their Asian Buy list, while another house downgraded the counter to Hold from O/p with TP of $1.08 on valuation grounds. At the current price, Vard trades at 11.9x forward P/E and 1.7x P/B. Maybank-KE maintains Buy with TP $1.27.