Swiber reported its 2Q FY08/1H FY08 earning on 13th Aug 08. As followed is a brief summary of the result.
1. Revenue for 1H FY08 up 337.4% to US$195.4m as compared with 1H FY07 of US$44.7m.
2. Gross Profit for 1H FY08 up 296.6% to US$50.6m as compared with 1H FY07 of US$12.8m.
3. Net Profit for 1H FY08 up 230.8% to US$32.6m as compared with 1H FY07 of US$9.8m.
4. EPS for 1H FY08 is 7.33 US cents as compared with 1H FY07 of 2.69 US cents.
5. NAV for 1H FY08 is 27.52 US cents as compared with 1H FY07 of 26.43 US cents.
The increase in revenue mainly derived from offshore construction projects and as of 30th Jun 08, the company has an order book of US$664m as compared to US$220m in Jun 07.
Based on the result, the followings are analysts' responses.
1. CIMB-GK maintains outperform rating but cut target price from $4.90 to $4.62 to reflect lower USD/SGD rate.
2. DMG maintains buy rating but cut target price from $4.01 to $3.37
3. DBSV maintains buy rating with unchanged target price of $3.49
Assuming Swiber is able to maintain its current performance for the rest of FY08, achieving a FY08 EPS of 14.66 US cents ( 20.524 S cents with 1.40 USD/SGD exchange rate ) conservatively is possible. At 15th Aug 08 price of $1.64, this translates into almost 8x FY08 PE. According to DBSV report dated 13th Aug 08, market consensus for FY08 EPS is 25.1 S cents.
Based on a conservative FY08 EPS of 20.524 S cents, the following is the price and its respective PE
15x FY08 PE -- $3.08
14x FY08 PE -- $2.87
13x FY08 PE -- $2.67
12x FY08 PE -- $2.46
11x FY08 PE -- $2.26
10x FY08 PE -- $2.05
9x FY08 PE -- $1.85
8x FY08 PE -- $1.64
7x FY08 PE -- $1.44
6x FY08 PE -- $1.23
5x FY08 PE -- $1.03
Investors who are interested in holding Swiber for long term could start to collect from 8x FY08 PE or less. Swiber from its performance is potentially worth at least $3.00 and at the price of $1.64 this would give an upside of around 83%. However, for investors who want a greater margin of safety, at 5x FY08 PE price level of $1.03 would be an attractive buy. Technically, Swiber has rebound from a low of $1.45 ( approx, 7x FY08 PE ) and could stay in the range between $1.45 to $1.70 for further consolidation.
