Projecting robust earnings recovery from FY12âs trough.
We believe Jayaâs earnings troughed in FY12 as the group transitioned to its new business
model. Despite fewer expected vessel sales/disposals, we project FY12-14F EPS CAGR of 54%, driven primarily by the Offshore Support division on a larger fleet, improved day rates, and better margins.
There is upside potential to our numbers as we have not assumed new vessel orders. BUY, TP S$0.85; a recovery play with potential dividend kicker.
With a clearer focus and less volatile earnings, we believe Jaya now offers a more attractive investment opportunity. We see a potential re-rating of the stock towards its book value on a strong 86% recovery in FY13 earnings.
The potential award of high-value newbuild orders and resumption of dividend payments following the refinancing of its scheme debt are likely catalysts. We re-instate coverage on Jaya with BUY and TP of S$0.85, pegged to 1.0x FY13 P/BV.
Target price of 0.85 does not take into account possible more vessel to be build in the pipeline. Therefore if new contract are taken, price could shoot very high.
the new controlling owners from Deutsche private equity have moved Jaya away from speculative build. Actually, it's a matter of judgement -- speculative build in good times can reap tremendous benefits that a conservative build-to-order approach doesn't. In current times, it's interresting to note that Nam Cheong is engaged in speculative build -- it takes too long to build and buyers don't want to wait.
Hello Burned, it's not a quarter's flash in the pan. If you look at their vessel chartering segment, the utilisation rate has gone up from 62% to 66% to 82% to 84% in the past 4 quarters.
JAYA is not a stock for trading, in my opinion. At the current level, it's a buy & keep for significant capital gain in the months ahead. It won't be 50 cents in Jan 2013 but higher than current level of 58 cents. Just my 2 cents' worth
A sure win rule for stock: When everyone shout sell, u buy When everyone shout buy, u sell.. I see a lot of ppl shouting buy.. by right Java price should have gone up already , at least >70 cents.. but is still stagnant. Think about it.
Don't buy or sell on the basis of anything but your own homework backed up by references to good analyst reports or web articles, forum comments, etc. My personal take on Jaya is...... it's worth at least its present book value of ard 85 cents.
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[Guest 23-12-2012]:
A sure win rule for stock: When everyone shout sell, u buy When everyone shout buy, u sell.. I see a lot of ppl shouting buy.. by right Java price should have gone up already , at least >70 cents.. but is still stagnant. Think about it.
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