Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Company Name: COASTAL CONTRACTS BHD
| Research House: MIDF | Price Call: BUY | Target Price: 2.34 |
Showing posts with label COASTAL. Show all posts
Showing posts with label COASTAL. Show all posts
October 10, 2012
February 27, 2012
COASTAL - Persevering in an uncertain market
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Coastal Contracts; Buy; RM2.40
Price Target: RM3.25; COCO MK
FY11 earnings in line. FY12F revenues largely backed by its RM610m order book with c.30% gross
margins. Maintain Buy with RM3.25 TP.
Source: HwangDBS Research 27 Feb 2012
Company Name: COASTAL CONTRACTS BHD
| Research House: HWANGDBS | Price Call: BUY | Target Price: 3.25 |
Coastal Contracts; Buy; RM2.40
Price Target: RM3.25; COCO MK
FY11 earnings in line. FY12F revenues largely backed by its RM610m order book with c.30% gross
margins. Maintain Buy with RM3.25 TP.
Source: HwangDBS Research 27 Feb 2012
Strong Vessel Delivery Surprise
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Company Name: COASTAL CONTRACTS BHD
| Research House: OSK | Price Call: BUY | Target Price: 3.00 |
February 3, 2012
COASTAL - Breaking boundaries
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Coastal Contracts; Buy; RM2.29
Price target: RM3.25; COCO MK
Breaking boundaries
Sustainable 2012 order book; upsides may follow. FPSO and LNG contracts may quadruple orderbook. Reiterate Buy with RM3.25 TP.
Source: HwangDBS Research 3 Feb 2012
Company Name: COASTAL CONTRACTS BHD
| Research House: HWANGDBS | Price Call: BUY | Target Price: 3.25 |
Coastal Contracts; Buy; RM2.29
Price target: RM3.25; COCO MK
Breaking boundaries
Sustainable 2012 order book; upsides may follow. FPSO and LNG contracts may quadruple orderbook. Reiterate Buy with RM3.25 TP.
Source: HwangDBS Research 3 Feb 2012
May 20, 2011
COASTAL - Coastal slips but cancellation of MoU with Ramunia minimal impact
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
KUALA LUMPUR: Shares of COASTAL CONTRACTS BHD [] fell in late afternoon on Friday, May 20 in line with a lacklustre market while analysts viewed the cancellation of the MoU with Ramunia Bhd would have minimal impact.
At 3.43pm, Coastal was down seven sen to RM3.57 with 371,000 shares done, off the intra-day high of RM3.65.
On Thursday, Ramunia said Coastal's unit Pleasant Engineering Sdn Bhd and Ramunia had both agreed not to proceed with the MoU signed on Jan 28, 2010 for the proposed collaboration to undertake tendering, bidding and fabrication in relation to structures for the O&G industry.
OSK Research said its fair value for Coastal remained unchanged at RM4.85 based on the existing price-to-earnings ratio (PER) of 8.0 times FY11 earnings.
'We continue to like Coastal for its strong delivery track record and we think its performance would be sustainable as it still has a strong orderbook of RM760 million which can keep the company busy over the next 12 months while it proceeds to enhance its shareholders' value by finding a business partner for the O&G opportunities,' it said.
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
KUALA LUMPUR: Shares of COASTAL CONTRACTS BHD [] fell in late afternoon on Friday, May 20 in line with a lacklustre market while analysts viewed the cancellation of the MoU with Ramunia Bhd would have minimal impact.
At 3.43pm, Coastal was down seven sen to RM3.57 with 371,000 shares done, off the intra-day high of RM3.65.
On Thursday, Ramunia said Coastal's unit Pleasant Engineering Sdn Bhd and Ramunia had both agreed not to proceed with the MoU signed on Jan 28, 2010 for the proposed collaboration to undertake tendering, bidding and fabrication in relation to structures for the O&G industry.
OSK Research said its fair value for Coastal remained unchanged at RM4.85 based on the existing price-to-earnings ratio (PER) of 8.0 times FY11 earnings.
'We continue to like Coastal for its strong delivery track record and we think its performance would be sustainable as it still has a strong orderbook of RM760 million which can keep the company busy over the next 12 months while it proceeds to enhance its shareholders' value by finding a business partner for the O&G opportunities,' it said.
April 13, 2011
COASTAL - Coastal secures RM61mil sale of tugs
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
Coastal Contracts Bhd
(April 12, RM3.40)
Maintain hold at RM3.42 with fair value of RM3.35: Coastal Contracts has secured the sale of 11 twin-screw tugboats worth RM61 million to a buyer based in Central America. Nine units are powered by 2,400 BHP (brake horse power) engines and are between 29m and 30m in length. One unit is 26m in length of close to 1,650 BHP, while the remaining unit is of the 24m and 1,200 BHP class.
The revenue from these vessel sales will be mostly recognised this year. These tugs, which are widely deployed for both harbour and coastal use, will unlikely be employed in the oil and gas industry, which uses higher premium anchor-handling tugs with higher safety specifications and engine capacities.
On average, these twin-screw tugboats are worth below US$2 million (RM6.06 million) per unit, while a 5,000 BHP anchor handling tug and supply vessel is priced at US$12 million to US$15 million each. As such, we expect the pre-tax margins from the sale of these vessels to be lower than the 30% registered by Coastal's shipbuilding segment in FY10.
With the fresh tugboat sales, Coastal's outstanding order book has risen by 10% to RM665 million currently ' which is expected to be recognised until FY12F.
As this represents only one time FY11F revenue, we maintain FY11F to FY13F earnings for now.
The recent ODS Petrodata conference indicated that charter rates for anchor handling tugs and platform supply vessels are only expected to improve towards end-FY12F and end-FY13F respectively, given that an estimated 400 vessels are expected to be delivered globally over the next two to three years.
As such, we do not expect a significant increase in additional vessel sales this year despite Coastal securing cumulative sales of RM329 million to date this year, which translates into 50% of FY11F revenue.
While the group hopes to venture into fabrication of oil and gas structures, this hinges on Coastal's proposed joint-ventures or potential merger with a licensed domestic operator. But these M&A plans are currently at an exploratory stage with no firm commitments from any parties.
Coastal currently trades at an FY11F price-earnings ratio (PER) of six times, which is at a 50% premium to the group's three-year average of four times.
Hence, we maintain our 'hold' call on Coastal with an unchanged fair value of RM3.35 based on FY11F PER of six times, at parity to its seven-year average. ' AmResearch, April 12
This article appeared in The Edge Financial Daily, April 13, 2011.
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
Coastal Contracts Bhd
(April 12, RM3.40)
Maintain hold at RM3.42 with fair value of RM3.35: Coastal Contracts has secured the sale of 11 twin-screw tugboats worth RM61 million to a buyer based in Central America. Nine units are powered by 2,400 BHP (brake horse power) engines and are between 29m and 30m in length. One unit is 26m in length of close to 1,650 BHP, while the remaining unit is of the 24m and 1,200 BHP class.
The revenue from these vessel sales will be mostly recognised this year. These tugs, which are widely deployed for both harbour and coastal use, will unlikely be employed in the oil and gas industry, which uses higher premium anchor-handling tugs with higher safety specifications and engine capacities.
On average, these twin-screw tugboats are worth below US$2 million (RM6.06 million) per unit, while a 5,000 BHP anchor handling tug and supply vessel is priced at US$12 million to US$15 million each. As such, we expect the pre-tax margins from the sale of these vessels to be lower than the 30% registered by Coastal's shipbuilding segment in FY10.
With the fresh tugboat sales, Coastal's outstanding order book has risen by 10% to RM665 million currently ' which is expected to be recognised until FY12F.
As this represents only one time FY11F revenue, we maintain FY11F to FY13F earnings for now.
The recent ODS Petrodata conference indicated that charter rates for anchor handling tugs and platform supply vessels are only expected to improve towards end-FY12F and end-FY13F respectively, given that an estimated 400 vessels are expected to be delivered globally over the next two to three years.
As such, we do not expect a significant increase in additional vessel sales this year despite Coastal securing cumulative sales of RM329 million to date this year, which translates into 50% of FY11F revenue.
While the group hopes to venture into fabrication of oil and gas structures, this hinges on Coastal's proposed joint-ventures or potential merger with a licensed domestic operator. But these M&A plans are currently at an exploratory stage with no firm commitments from any parties.
Coastal currently trades at an FY11F price-earnings ratio (PER) of six times, which is at a 50% premium to the group's three-year average of four times.
Hence, we maintain our 'hold' call on Coastal with an unchanged fair value of RM3.35 based on FY11F PER of six times, at parity to its seven-year average. ' AmResearch, April 12
This article appeared in The Edge Financial Daily, April 13, 2011.
April 12, 2011
COASTAL - AmResearch 'hold' call on Coastal stays
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
AmResearch is maintaining a "hold" recommendation on Coastal Contracts Bhd with an unchanged fair value of RM3.35 per share.
The company has secured the sale of 11 tugboats worth RM61 million to a buyer based in Central America and with this, its outstanding order book has risen by 10 per cent to RM665 million currently.
"As this represents only one time of final year of 2011 forecast revenue, we maintain the financial year 2011- 2013 earnings forecast for now," it said in a research note.
It also said that they do not expect a significant increase in additional vessel sales this year despite Coastal Contracts securing cumulative sales of RM329 million to date this year, which translates to 50 per cent of the final year 2011 revenue.
AmResearch said the group also hopes to venture into the fabrication of oil and gas structures, which hinges on its proposed joint-ventures or potential merger, with a licensed domestic operator.--Bernama
The company has secured the sale of 11 tugboats worth RM61 million to a buyer based in Central America and with this, its outstanding order book has risen by 10 per cent to RM665 million currently.
"As this represents only one time of final year of 2011 forecast revenue, we maintain the financial year 2011- 2013 earnings forecast for now," it said in a research note.
It also said that they do not expect a significant increase in additional vessel sales this year despite Coastal Contracts securing cumulative sales of RM329 million to date this year, which translates to 50 per cent of the final year 2011 revenue.
AmResearch said the group also hopes to venture into the fabrication of oil and gas structures, which hinges on its proposed joint-ventures or potential merger, with a licensed domestic operator.--Bernama
April 6, 2011
COASTAL - Coastal Contracts riding high on merger speculation
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
Coastal Contracts Bhd
(April 6, RM3.50)
Downgrade to hold at RM3.41 with fair value RM3.35: We downgrade our call on Coastal Contracts Bhd from 'buy' to 'hold' as the surge in share price has reached our unchanged fair value of RM3.35, pegged to an FY11F price-earnings ratio (PER) of six times, based on the group's seven-year average forward PER.
Coastal's share price surged 33 sen or 11% yesterday, following a news report that the group is planning to sell a major stake to a strategic partner as part of its plan to diversify into the fabrication business.
These market rumours are not a surprise, given that our report on Feb 10 this year had already highlighted the potential M&A exercise.
In a reply to Bursa Malaysia, Coastal highlighted that the proposed collaboration with Ramunia Fabricators Sdn Bhd is still under discussion and does not involve the selling of a major stake in Coastal.
The company also emphasised that if the proposed collaboration with Ramunia Fabricators fails to materialise, Coastal would be open to other options with alternative strategic partners to diversify into the offshore structure fabrication business.
Coastal also noted that the board has not formed a firm intention to sell a major stake to any identified party. Our channel checks reveal that the collaboration and M&A negotiations are with various parties and are still at a preliminary stage.
On fundamentals, the group's current order book of RM760 million will last until mid-2012 and it would face an earnings contraction in the absence of fresh vessel sales in FY12F.
Given the huge incoming global delivery of anchor handling tug supply vessels, Coastal's prospects would not appear exciting if a merger fails to materialise.
We have projected flat earnings growth over FY11F/13F, which incorporate fresh orders of RM700 million to RM800 million in FY12F/13F. In our oil and gas sector report on April 5, we highlight that charter rates for anchor handling tug supply vessels are only expected to improve towards end-2012 and platform supply vessels by end-2013.
Hence, we are of the view that the stock is currently fairly valued given that its current PER of six times is at its seven-year average. ' AmResearch, April 5
This article appeared in The Edge Financial Daily, April 7, 2011.
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
Coastal Contracts Bhd
(April 6, RM3.50)
Downgrade to hold at RM3.41 with fair value RM3.35: We downgrade our call on Coastal Contracts Bhd from 'buy' to 'hold' as the surge in share price has reached our unchanged fair value of RM3.35, pegged to an FY11F price-earnings ratio (PER) of six times, based on the group's seven-year average forward PER.
Coastal's share price surged 33 sen or 11% yesterday, following a news report that the group is planning to sell a major stake to a strategic partner as part of its plan to diversify into the fabrication business.
These market rumours are not a surprise, given that our report on Feb 10 this year had already highlighted the potential M&A exercise.
In a reply to Bursa Malaysia, Coastal highlighted that the proposed collaboration with Ramunia Fabricators Sdn Bhd is still under discussion and does not involve the selling of a major stake in Coastal.
The company also emphasised that if the proposed collaboration with Ramunia Fabricators fails to materialise, Coastal would be open to other options with alternative strategic partners to diversify into the offshore structure fabrication business.
Coastal also noted that the board has not formed a firm intention to sell a major stake to any identified party. Our channel checks reveal that the collaboration and M&A negotiations are with various parties and are still at a preliminary stage.
On fundamentals, the group's current order book of RM760 million will last until mid-2012 and it would face an earnings contraction in the absence of fresh vessel sales in FY12F.
Given the huge incoming global delivery of anchor handling tug supply vessels, Coastal's prospects would not appear exciting if a merger fails to materialise.
We have projected flat earnings growth over FY11F/13F, which incorporate fresh orders of RM700 million to RM800 million in FY12F/13F. In our oil and gas sector report on April 5, we highlight that charter rates for anchor handling tug supply vessels are only expected to improve towards end-2012 and platform supply vessels by end-2013.
Hence, we are of the view that the stock is currently fairly valued given that its current PER of six times is at its seven-year average. ' AmResearch, April 5
This article appeared in The Edge Financial Daily, April 7, 2011.
COASTAL - Coastal downgraded to 'hold'
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
Company Name: COASTAL CONTRACTS BHD
Research House: AMMB
Coastal Contracts Bhd was cut to “hold” from “buy” at AmResearch Sdn Bhd as the recent surge in the Malaysian shipbuilder’s share price has reached the brokerage’s fair value of RM3.35 for the stock.
The stock slid 2 per cent to RM3.46 at 10:32 a.m. in Kuala Lumpur trading, set for its biggest decline since March 15, snapping an eight-day rally. -- Bloomberg
The stock slid 2 per cent to RM3.46 at 10:32 a.m. in Kuala Lumpur trading, set for its biggest decline since March 15, snapping an eight-day rally. -- Bloomberg
April 5, 2011
COASTAL - Coastal a potential M&A target
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
Coastal Contracts Bhd
(April 4, RM3.41)
Maintain buy at RM3.08 with target price RM4.85: We maintain our 'buy' call on Coastal contracts for three reasons: (i) its current share price is very attractive at a price-earnings ratio of'' five times against the oil and gas industry's 12 to 14 times, which makes it an attractive takeover target; (ii) it has a strategic asset in its 40.47ha shipbuilding yard, which can be converted into an O&G facility for fabrication or even repair and maintenance jobs; and (iii) the location of the yard in Sandakan, Sabah, where most of the deepwater activities will be centred in the future.
Of course, this was considered at the end of 2008, when oil prices dropped and new orders slowed to a trickle. We see this ambition to diversify as value-adding for the company and its share price as we believe such a move would allow the stock to trade above its historical average price-earnings ratio (PER) of four to five times. Management has even made tentative moves, signing an MoU with Ramunia Holdings Bhd as well as reportedly holding talks recently with Alam Maritim Resources Bhd.
Our historical analysis shows that Coastal's performance has been consistent since the crash in crude oil price as it has been delivering quarterly results that either met or exceeded investors' expectations over the last 10 quarters.
This is in contrast to other O&G companies, whose earnings had been flat or lower quarter-on-quarter during this recovery period. We believe this gives Coastal a strong advantage in positioning the company ahead of its peers as many of them have disappointed investors in one quarter or another.
If our expectations materialise, Coastal's share price could touch our fair value of RM4.85 anytime soon, since this is based on an undemanding PER valuation of eight times FY11 earnings.
Given its impeccable track record, we do not believe Coastal's shareholders would be willing to sell its shares at the current price, which is based on a PER of five times. Hence we think this would provide further upside to its share price. ' OSK Research, April 4
This article appeared in The Edge Financial Daily, April 5, 2011.
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
Coastal Contracts Bhd
(April 4, RM3.41)
Maintain buy at RM3.08 with target price RM4.85: We maintain our 'buy' call on Coastal contracts for three reasons: (i) its current share price is very attractive at a price-earnings ratio of'' five times against the oil and gas industry's 12 to 14 times, which makes it an attractive takeover target; (ii) it has a strategic asset in its 40.47ha shipbuilding yard, which can be converted into an O&G facility for fabrication or even repair and maintenance jobs; and (iii) the location of the yard in Sandakan, Sabah, where most of the deepwater activities will be centred in the future.
Of course, this was considered at the end of 2008, when oil prices dropped and new orders slowed to a trickle. We see this ambition to diversify as value-adding for the company and its share price as we believe such a move would allow the stock to trade above its historical average price-earnings ratio (PER) of four to five times. Management has even made tentative moves, signing an MoU with Ramunia Holdings Bhd as well as reportedly holding talks recently with Alam Maritim Resources Bhd.
Our historical analysis shows that Coastal's performance has been consistent since the crash in crude oil price as it has been delivering quarterly results that either met or exceeded investors' expectations over the last 10 quarters.
This is in contrast to other O&G companies, whose earnings had been flat or lower quarter-on-quarter during this recovery period. We believe this gives Coastal a strong advantage in positioning the company ahead of its peers as many of them have disappointed investors in one quarter or another.
If our expectations materialise, Coastal's share price could touch our fair value of RM4.85 anytime soon, since this is based on an undemanding PER valuation of eight times FY11 earnings.
Given its impeccable track record, we do not believe Coastal's shareholders would be willing to sell its shares at the current price, which is based on a PER of five times. Hence we think this would provide further upside to its share price. ' OSK Research, April 4
This article appeared in The Edge Financial Daily, April 5, 2011.
April 4, 2011
COASTAL - Coastal advances at mid-morning
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
KUALA LUMPUR: COASTAL CONTRACTS BHD [] shares advanced on Monday, April after the Edge Weekly reported that Coastal was eyeing a strategic shareholder to diversify into the fabrication business.
At 10.30am, Coastal was up 13 sen to RM3.21 with 1.91 million shares done.
OSK Research maintained its Buy call on Coastal with a fair value of RM4.85, and said the news was not only within its expectation, but in fact it had envisaged something even bigger for the company.
'We believe Coastal could be a potential merger and acquisition target since its share price valuation is appealing and it owns a strategic asset in its 100-acre yard which sits tight in a strategic area, and which is currently being coveted by many O&G operators for conversion to facilitate fabrication or repair and maintenance jobs,' it said on April 4.
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
KUALA LUMPUR: COASTAL CONTRACTS BHD [] shares advanced on Monday, April after the Edge Weekly reported that Coastal was eyeing a strategic shareholder to diversify into the fabrication business.
At 10.30am, Coastal was up 13 sen to RM3.21 with 1.91 million shares done.
OSK Research maintained its Buy call on Coastal with a fair value of RM4.85, and said the news was not only within its expectation, but in fact it had envisaged something even bigger for the company.
'We believe Coastal could be a potential merger and acquisition target since its share price valuation is appealing and it owns a strategic asset in its 100-acre yard which sits tight in a strategic area, and which is currently being coveted by many O&G operators for conversion to facilitate fabrication or repair and maintenance jobs,' it said on April 4.
February 10, 2011
COASTAL - OSK Research maintains Buy on Coastal Contracts, TP unch RM4.41
Stock Name: COASTAL
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Buy call on COASTAL CONTRACTS BHD [] with an unchanged target price of RM4.41, based on the existing PER of 8.0 times FY11 earnings.
'Despite being only a shipbuilder, we continue to like Coastal for its strong delivery track record,' it said on'' Thursday, Oct 10.
On Wednesday, Coastal announced that its units had collectively secured contracts for the sale of seven offshore support vessels; ii) three tug boats, and iii) two oil barges.
OSK Research said it came to understand the seven offshore support vessels are Anchor Handling Tug and Supply vessels (AHTS). The new contracts are worth a total of RM268 million.
'With this contract on board, we believe that Coastal's orderbook should keep the company busy for at least for the next 12 months. Nevertheless, we think that this may mark the start of more newbuild contract awards, especially for offshore support vessels.
'Hence we expect more to follow given the increase in O&G activities in the region. Also, newbuilds are required as most of Coastal's customers would need to replace their vessels after having put off ordering new ones in the past two years,' it said.
Company Name: COASTAL CONTRACTS BHD
Research House: OSK
KUALA LUMPUR: OSK Research is maintaining its Buy call on COASTAL CONTRACTS BHD [] with an unchanged target price of RM4.41, based on the existing PER of 8.0 times FY11 earnings.
'Despite being only a shipbuilder, we continue to like Coastal for its strong delivery track record,' it said on'' Thursday, Oct 10.
On Wednesday, Coastal announced that its units had collectively secured contracts for the sale of seven offshore support vessels; ii) three tug boats, and iii) two oil barges.
OSK Research said it came to understand the seven offshore support vessels are Anchor Handling Tug and Supply vessels (AHTS). The new contracts are worth a total of RM268 million.
'With this contract on board, we believe that Coastal's orderbook should keep the company busy for at least for the next 12 months. Nevertheless, we think that this may mark the start of more newbuild contract awards, especially for offshore support vessels.
'Hence we expect more to follow given the increase in O&G activities in the region. Also, newbuilds are required as most of Coastal's customers would need to replace their vessels after having put off ordering new ones in the past two years,' it said.
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