Cosmosteel

Cosmosteel: The one-stop inventory specialist’s 4QFY14 net profit rose 74.1% y/y to $2m, bringing full year net profit to $5.5m (-12.9%). 4Q14 revenue rose 23.4% to $41.5m, from higher sales in the Energy sector (to $35.1m, +38.8%), offset by declines in the Marine Sector ($4.6m, 33.7%). Gross profit margin increased 1.1ppt to 20.1% on increased revenue. In line with revenue growth, distribution ($2.8m, +12.7%) and admin ($3.2m, +24.5%) expenses both grew. Gearing ratio grew 0.3ppt to 0.97x. Cosmosteel counts Keppel Corp, Sembcorp Marine, Alstom, Chevron and Shell among its key blue-chip customers. Management expects both the Energy and Marine sectors to continue contributing to FY15 financial performance. Particularly, the regional upstream energy sector will be driven by large order sizes. Management also aims to grow revenue from Vietnam, China and Philippines via marketing efforts, given these countries have a healthy pipeline of energy-related projects. Final and full year DPS halved to 0.5¢, implying a yield of 1.35%. Cosmosteel is trading at 17.6x FY14 P/E