Wednesday, January 23, 2013

Tat Hong

Tat Hong: Maybank KE maintains it conviction BUY rating with $1.78 TP based on a forward P/E of 14.5x, highlighting that the company has a prospective EPS growth rate of 30% over the next three years. House notes that Tat Hong is still in the middle of a multi-year growth cycle and 2013 will turn out to be another good year. Supported by growth in most of the markets it operates in, house expects utilisation and rental rates to continue to climb while group ROE is expected to recover. Australia’s energy sector will be a major revenue driver. With new gas discoveries in North and West Australia, it is reasonable to expect the domestic LNG boom to last a few more years, with Tat Hong being a major beneficiary. Note that Civmec and Ausgroup has also recently announced new projects with the region. Also, regional infrastructure development remains in high gear with many countries in the Asia Pacific banking on infrastructure construction to pull their economies out of the doldrums. As the biggest crane rental company in Asia, not many competitors can compare in size to Tat Hong.

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