Favorite Links

Thursday, September 13, 2012

OCBC tips further upside for Dyna-Mac Holdings


OCBC tips further upside for Dyna-Mac Holdings despite its around 29% rise since early June; “the group is well-positioned to benefit from possible new order wins.”

It notes FPSO industry fundamentals are robust and recent orders have emerged at a near-record pace, with the current order backlog at a peak of 67 units as of April, according to International Maritime Associates.
“In terms of fabrication facilities, Asia remains the dominant location, accounting for almost half the facilities active in the sector. As DMH is one of the leading players for FPSO topside fabrication in Asia, we believe it should be able to capture its fair share of new orders.”

It notes DMH recently acquired a 70% stake in a China yard and rented a Malaysia yard to increase maximum production capacity by at least 80%. OCBC raises its fair value to $0.62 from $0.52, based on a valuation peg of 12x from 10x previously on the improving outlook. It keeps a Buy call.

The stock is +3.9% at $0.535, making the top-volume rolls with 5.3% of shares traded on the SGX.

No comments:

Post a Comment