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KimEng targets $1.1 this morning!!!!!!CHEONG AH!!!!!!!!!!!!!!!
Upgrading our target price to S$1.10 on improving outlook
HSE is trading at undemanding earning multiples of 12.6x for FY08 and 10.3x for
FY09. We have upgraded our target price to S$1.10 from S$0.95 based on ex-cash
multiple of 13.5x FY08 PE. Reiterate BUY.
Good set of results:
Turnover +63.1%
Net Profit +175.2%
EPS 5.54 +156.5%
Net Assets per Share 18.6 -15.5%
Div 1c Sp Div 4c
Now Kim targets $0.95!
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The outlook of the international market for oil & gas downstream fabricators is strong because order books are filled for the next three years. The situation in Singapore is no different: Shell is building a US$3bn petrochemical cracker while ExxonMobil is looking to add a second cracker unit, which will add capex of US$6-8bn over the next few years from just these two players alone. EDB is aiming for Jurong Island to more than double its current 60-70 plants to about 150 by 2010. Our view is supported by the International Energy Agency (IEA), which has noted that the oil services fabrication industries and refinery construction firms are fully booked for the next two to three years with implementation delays expected. A total of 15.1 mb/d (equivalent to US$302bn) of new capacity was announced for completion before 2011. As a specialist contractor to the global turnkey players, we expect Hiap Seng Engineering (HSE) to benefit from orders outsourced by the international players. HSE expects to execute more than S$100m worth of orders from Shell alone over the next three years. HSE is targeting more than 10 orders worth S$10-30m each. Given the tight market conditions, HSE is able to cherry pick the more lucrative contracts. As HSE?s historical success rates exceed 40%, we believe the group is well-poised to secure more orders in the coming months, which could result better margins. HSE?s acquisition of L&M?s former pre-cast yard (600,000 sq ft) in late 2006 would effectively double its domestic capacity. This comes at an opportune time as enquiries begin to intensify. It has formed strategic alliances with Chinese oil majors CNOOC and CNPC to penetrate the Chinese market, where we expect downstream spending to increase over the next couple of years. With its new added capacity, HSE believes it can handle up to S$400m worth of orders per annum (compared to sales of S$110m in FY06) HSE?s reactivated unit, which serves upstream & downstream players, has secured orders worth S$41m so far (compared to S$12m in FY06). More orders are expected. HSE trades at undemanding earning multiples of 11.2x and 9.0x for FY08-09 respectively. We believe HSE deserves a minimum ex-cash multiple of 13.0x FY08 PE, which translates to a target price of S$0.95. Reiterate BUY recommendation. |
Target price $0.92!!! according to CIMB
Hiap Seng Energy (S$0.67) - Initiating coverage ? Undervalued to peers
? Timely move into gas compression and offshore fabrication businesses. HSE?s
move into gas compressors in 2005 has enabled it to capture rising demand for
natural gas as an alternative source of energy and the booming offshore cycle.
move into gas compressors in 2005 has enabled it to capture rising demand for
natural gas as an alternative source of energy and the booming offshore cycle.
? Strong local contender for Jurong Island projects. Being one of the three local
fabrication engineering companies preferred by Shell and Exxon Mobil, we are
confident that HSE can benefit from their U$6bn expansion plans as well as fresh
investments on Jurong Island.
fabrication engineering companies preferred by Shell and Exxon Mobil, we are
confident that HSE can benefit from their U$6bn expansion plans as well as fresh
investments on Jurong Island.
? Undemanding valuations. HSE is a small but viable proxy for the robust oil and gas
sector. We have an earnings CAGR forecast of 42% for FY07-09. Our target price of
S$0.92 is set at 12x CY08 P/E, in line with the average for its regional peers. HSE is
trading at 11.4 x CY07 P/E, vs. peers? 15.1x. The successful execution of orders and
contract wins are expected to catalyse its stock price. With 37% upside potential, we
initiate coverage with Outperform
sector. We have an earnings CAGR forecast of 42% for FY07-09. Our target price of
S$0.92 is set at 12x CY08 P/E, in line with the average for its regional peers. HSE is
trading at 11.4 x CY07 P/E, vs. peers? 15.1x. The successful execution of orders and
contract wins are expected to catalyse its stock price. With 37% upside potential, we
initiate coverage with Outperform
Thank god! I managed to sell at breakeven price (no loss no gain). Will go in again if price drop again.
The price keep dropping .... agggrrrrrhhhhh.
Hope it will bounce back
Rose to an all-time high after Kim Eng Securities initiated coverage with a "buy" rating and a target price of $0.95.
"As a specialist contract to the global turnkey players whose order books are fully booked for the next three years, Hiap Seng has only started to see order flows coming through," Kim Eng said in a client note.
"Hiap Seng has also formed two strategic alliances with two Chinese oil majors to penetrate the Chinese market, where we see downstream spending increasing over the next couple of years," it said.
when the ceo sold, he might be selling at one end, and buying at the other
remember yongnam directors sold at 0.14 ??? now the stock is 0.24 !!!
You and the investment house thinkers must have been dwelling much on the bearishness of things during times of extreme pessimism and warnings from all quarters.
What on earth is going on?!?! Let go at 0.52 not long ago, now price climbing like there's no tomorrow (today 0.735). Strange thing is that the investment houses are ignoring this stock. Comments?