STX PO: CIMB Maintains Underperform, lowers TP to $11.90 from $13.20. Core net profit of US$36.0m was worse than expected due to disappointing profits from Bulk segment at US$124m and larger than expected losses of $40m from Tanker segment. House has a negative view on both bulk and tanker shipping sector and sees 25 yr contracts with Vale (starts in 3Q11) and Fibria Celulose (starts in 4Q12) as hope for co and will help to deliver more stable revenues…
Highlights in results conference include a high coverage ratio of chartered capsize fleet to protect against short-term volatility in rates for vessel class and bunker cost hikes to be covered by pass-through clauses which decrease the volatility of earnings due to oil prices. Valuations based on 10% discount to SOTP. Co trades at current P/B of approx 0.9x
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