ASL Marine

ASL Marine: Announced weak 3Q11 result below expectations, with rev at $86m, -22% YoY and -16.5% QoQ, while net profit at $8m, -14% YoY and -20% QoQ. Gross Margins dipped slightly to 12.1% vs 12.9% YoY, due to competition and pricing pressure. Drop in rev was attributed largely to a decline from shipbuilding segment attributed to a lower order book, while rev frm ship chartering declined 11% YoY, dragged by a weaker demand for towing jobs.....

Going forward, Grp has an outstanding shipbuilding order book at $218m for 41 vessels, scheduled for progressive deliveries up to 1Q12, while grp commands a ship chartering fleet of 190 vessels, with an orderbook of approximately $25m with respect to long term ship chartering contracts.....

We note that at current price, grp trades at an annualised 7.5x FY11E P/E vs peers average of 11.5x. Barring any unforeseen circumstances, Grp expects to remain profitable for FY11, but expect new shipbuilding orders to remain slow and the operating environment of shiprepair and conversion segment to remain highly competitive, challenging profit levels. CIMB maintains Neutral but reduces TP to $0.70 from $0.81.