Vard

Vard: Maybank-KE upgrade the Vard to a BUY (from HOLD) with TP of $1.12 pegged to 8x PER on average FY13-15F earnings. In house opinion, current share price has more than priced in the execution issues in its Brazil yards. Leading OSV owners who are key clients of Vard have expressed high levels of optimism in long-term OSV demand. Vard’s 2013 order wins have also reached initial expectations and house believe that further order wins would set the stage for a positive re-rating. Scenario analysis suggests a bull/bear case TP of $1.48/0.80, which makes a compelling investment case based on risk-reward tradeoff. House upgrade the stock to BUY with TP raised to $1.12 based on base case scenario.