CIMB Researh has maintained its Add rating on TH Heavy Engineering Bhd (THHE) at 90 sen with a higher target price of RM1.23 (from RM1.20) and said fabrication order book replenishment and the new FPSO venture were the main talking points at its recent roadshow with management of THHE.
In a note Aug 15, CIMB Research analyst Norziana Md Inon said the positive surprise from the roadshow was that the company may add a second FPSO vessel in as early as 1H15.
Norziana said her target price rises as she raised her FY15-16 EPS for THHE to impute contribution from the fabrication of FPSO modules, which more than offsets the dilutive impact from the warrants.
“We continue to value the stock at a CY15 P/E of 16.4x, a 30% discount to the average P/E of the oil & gas big caps.
“A growing order book and successful FPSO and T&I ventures are the potential re-rating catalysts.
“THHE remains an Add and our top pick among the oil & gas small caps,” she said.
In a note Aug 15, CIMB Research analyst Norziana Md Inon said the positive surprise from the roadshow was that the company may add a second FPSO vessel in as early as 1H15.
Norziana said her target price rises as she raised her FY15-16 EPS for THHE to impute contribution from the fabrication of FPSO modules, which more than offsets the dilutive impact from the warrants.
“We continue to value the stock at a CY15 P/E of 16.4x, a 30% discount to the average P/E of the oil & gas big caps.
“A growing order book and successful FPSO and T&I ventures are the potential re-rating catalysts.
“THHE remains an Add and our top pick among the oil & gas small caps,” she said.
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