CSE Global: At 23% of CIMB's FY15 forecast, 1Q15’s core net profit of S$7.6m (+1% yoy) was in line with its expectations and consensus.
CSE’s diversified and maintenance-oriented business model is braving the oil price rout admirably. Another positive was its order book expansion, which has grown 22% yoy to $252.5m.
CIMB increases its FY15-17 EPS by 5-7% on stronger revenues, which lifts its 9x CY16 P/E-target price (its 5-year mean). Anticipating a steady course for the rest of the year, house upgraded the stock to Add from Hold (TP $0.65).
At 8x CY16 P/E, investors are buying a positive FCFE-yielding stock which is in a net cash position, generates 14-15% ROE and rewards its shareholders with a 5% dividend yield.
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