Tuesday, January 28, 2014
Jaya: OSK-DMG notes the 2QFY14 results released last week were in line. Vessel chartering earned US$10.2m and shipyards lost US$2.7m on healthy charters and low yard utilisation respectively. As highlighted in the previous quarter, Jaya’s strong chartering performance is suffering a 25% drag by the under-utilised shipyard. Valuation looks high with Jaya now trading at a 14x FY14F P/E premium and the stock is back to near book value, even though ROE is only 7%. While yield is attractive at 5-6% yield, representing a 66-79% payout ratio, OSK-DMG believes the stock is fully priced with slow mid-term growth and limited dividend upside. For exposure to the offshore support vessel (OSV) sector, the house says choose Nam Cheong (BUY, TP $0.45) for exposure to the OSV segment. Expects Nam Cheong share price to outperform over the next 12 months, as it is trading at 7x FY14F P/E, with 25% growth and 25% ROE.