STX OSV: Order win momentum continues, with grp securing new contracts to build 2 vessels for Farstad Shipping worth Nok1.2b (US$218.6m). Vessels are scheduled for delivery in 2Q13. We note that contract wins brings orderbook to an approximate Nok17.7b and Ytd grp has secured Nok3.8b worth of orders (exclude contracts for 8 LPG carriers worth Nok 3b, not yet made effective) vs FY10 order intake of Nok12.5b ……
At current price, valuation appears compelling, with grp trading at 6.8x FY11E P/E vs historical average of 9.8x and SGX peers average of 7.5x. Houses generally prescribe a multiple premium on grp vs SGX OSV builders, due to grp’s strong orderbook, mkt share and expertise in the high specs OSVs industry which non of the local peers are have a commanding presence in. CIMB maintains O/p target with $1.70 TP…..
Technically, grp is sitting on its 10- and 20-day MA at $1.20, just above its 50-day MA at $1.19, which may offer support; the $1.25 recent peak will likely cap.
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