The Star Malaysia - StarBiz - - Analyst Reports -

By PublicIn­vest Re­search Out­per­form Tar­get price: RM0.73

E.A. Tech­nique (EAT) has de­vel­oped it­self as a lo­gis­tics provider which en­gages as an owner and op­er­a­tor.

Its core busi­ness, marine op­er­a­tions con­sti­tute 99.5% of rev­enue.

It is di­vided into two cat­e­gories, marine trans­porta­tion and off­shore stor­age of oil and gas, as well as port marine ser­vices.

EAT’s out­stand­ing or­der­book in hand stands at RM930.5mil in­clud­ing con­tract ex­ten­sions. This trans­lates into 4.2 times of marine op­er­a­tions’ rev­enue as of FY17.

Fur­ther­more, the group has sub­mit­ted var­i­ous ten­ders amount­ing to about RM1­bil.

PublicIn­vest Re­search is nonethe­less con­ser­va­tive in only as­sum­ing an RM150mil (15%) in FY19 re­plen­ish­ment, con­trary to ex­pec­ta­tion of be­tween 30% and 40% suc­cess rate.

The bulk (76%) of EAT’s fleet of 43 ves­sels are on long-term char­ters, with tenures stretch­ing un­til 2027.

Only nine ves­sels have con­tracts ex­pir­ing in the near-term while two ves­sels are un­der short-term time char­ter and spot voy­ages.

On av­er­age, EAT’s long-term con­tracts have out­stand­ing pe­ri­ods of about six years.

This has re­sulted in high fleet util­i­sa­tion of above 80%.

“We ex­pect EAT to reg­is­ter strong growth of more than 100% and 26.6% in FY18 and FY19 on the back of its out­stand­ing or­der book of RM930.5mil and ten­der book of RM1­bil.

“For FY20, we are ex­pect­ing mar­ginal growth of only 6.6%, in line with our con­ser­va­tive or­der book re­plen­ish­ment as­sump­tion,” said PublicIn­vest Re­search.

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