Vard

Vard: CLSA initiates Coverage with O/p rating and TP $1.21. The house notes that Vard is a high end speciality shipbuilder focused on high end OSV and OSCVs. Expect strong demand for both sub-sea vessels as well as large AHTS which will continue to support recent order win momentum. Stabilisation of Brazil operations will lead to a margin recovery, which in combination with a record NOK 21bn order book will drive 37% earnings CAGR over FY13-16. Vard’s key competitive strengths include strong R&D/design capabilities, execution track record and long term client relationships.