COASTAL–Fundamental Analysis (22 May 2015)

COASTAL Analysis:-

Excel –

Notes –

My View:-

  • Valuation:
    • Absolute EY% Valuation:
      • Trailing:
        • FY14 (EPS: 0.367) – Fair value 3.15 (Fair Value Uncertainty: HIGH)
        • R4Q (EPS: 0.391) – Fair value 3.36 (Fair Value Uncertainty: MEDIUM)
      • Forward:
        • FY15 (EPS: 0.444) – Fair value 3.82 (Fair Value Uncertainty: MEDIUM)
        • FY16 (EPS: 0.385) – Fair value 3.31 (Fair Value Uncertainty: MEDIUM)
      • EPS applied to reach the current stock price (2.92): 0.34
    • Uncertainty of fair value range MEDIUM to HIGH. Valuation is not so attractive.
  • 1Q15 net profit surged 34.1% YoY to RM65.9m from RM49.2m due to higher OSV vessels delivered by the group (5 units in 1Q15 vs. 3 units in 1Q14). However, gross margin declined to 18.7% in 1Q15 compared to 23.4% in 1Q14 due to lower margin vessel mix.
  • COASTAL is awaiting its 2nd high-specification jack-up rigs due for delivery in 2H15. If no contract is secured, the management will elect to dispose the rig pre-actual delivery to reduce their risk exposure.
  • 22 May 2015 – Excluding its 1st Jack Up rig sale earlier and RM1.3b Gas rig contract, the group’s orderbook stands at RM1.1b providing earnings visibility until 2017 amid current challenging market.
  • I will closely monitor this stock. This is a good stock for trading.

Latest Financial – Q1 2015 Financial Report (21 May 2015)

At the time of writing, I did not own shares of COASTAL.


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