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Here is the 18 page CIMB report on Jaya Holdings recently released -
http://www.remisiers.org/cms_images/rese...12cimb.pdf [Report]
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Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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Jaya was actually under my watchlist and supposedly one of the few I am planning to purchase in 2012 (when the offshore o&g sector improves)
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Did a quick look at the FY12 FY numbers, the profit is boosted by one-timers in reversal of provision and tax writen-back. Taking these 2 items out, we are looking at half the PAT.
I like how the cashflow is looking like, with some paring down of debts, and gearing continue to drop. Hopefully by next year, it can be net cash.
Based on the MD&A, appears company is re-naming its divisions, maybe good way to sharpen market's perception.
All in, I think good direction that new management is moving in, the lack of dividend continues to be a bug bear for me, but I do feel it may be time to relook this company.
Any comments? Thanks
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Kevin Scully has written an article on Jaya Holdings after attending its analyst briefing -
http://www.nextinsight.net/index.php/sto...-the-light [Article]
Interesting to note that the Company cannot pay a dividend till it completes repaying the 5 year debt facility.
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Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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Thanks for bringing to my attention Nick.
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If you look closely to its Offshore Support division(segment data), it made much less profit than last year after removal of the gain from disposal of vessels, though they had more vessels. but the management tout this division as the future. How could the management have confidence on the future when the earning tells you that you are unlikely to make more profit from it?
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The announcement is indeed good news for Jaya.
Actually, the latest announcement is just a confirmation that they have gotten "out of jail".
After these few years of being frozen from dividend payment, it will be interesting to see what the payout will be when it is due.
Like what Kelvin Scully has mentioned in his article in the earlier thread, the Jaya of today is a much leaner animal than that of yester-years.
With its low gearing - 0.1 times and the financial discipline that was enforced during the last few years, the discount to book value "is more real" than that of Ezra and Swiber.
Both Ezra and Swiber bear similar resemblance to that of Muddy Olam - repeated issuance of debt and perpetual equity instruments and hence book values of Ezra and Swiber can be more questionable if investors decide to impose critical standards for their credit evaluations.
Jaya has US$179.4m in stocks and WIP as of the latest quarter that requires additional US$239m for completion. The total market value of the 12 completed vessels is US$486m at the low end, translating into a surplus of US$67.6m. 3 of the vessels have been contracted for sales at US$95m. Should the sales be completed, Jaya should be in a net cash position.
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DBS Securities Reinstated Coverage With BUY, Target Price: S$0.85:
A new chapter of growth
• Clearer direction with repositioned businesses
• Strategic alliance with IHC a potential game changer
• Earnings have troughed; projecting FY12-14 EPS
CAGR of 54%
• A recovery play with potential dividend kicker; reinstate
coverage with BUY, +45% to TP of S$0.85
Repositioned businesses provide clearer direction. Jaya has
repositioned itself as a services provider to the offshore energy
sector. Its core focus on chartering ensures a higher level of
recurring income, while a move away from speculative
shipbuilding would reduce earnings volatility.
Strategic alliance with IHC Merwede - a potential game
changer. This could see both parties collaborating to build
IHC’s high specification offshore vessels at Jaya’s yards. Securing
such orders would propel Jaya up the value chain and enable it
to leapfrog its regional competitors. Indeed, recent media
reports indicate that IHC-Jaya is in talks with several parties for
potentially 7-10 orders worth EUR70-150m each.
Projecting robust earnings recovery from FY12’s trough.
We believe Jaya’s 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.
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