Seatrium Ltd    Last:2.02   -

2024 New ERA

Yes it works both ways.....

MrBear12      ( Date: 13-Aug-2024 09:59) Posted: and catch retailers chasing the wind

 

and catch retailers chasing the wind

 

Congrats to those who bought 140... BB like give surprise when retail give up on this stock..

 

 

Happy National Day

 

https://www.businesstimes.com.sg/singapore/economy-policy/even-developed-economy-singapore-must-still-pursue-growth-and-upgrading-pm-wong

An assuring speech from PM Wong

 

May Singapore 🇸 🇬 be blessed

 

Steady at $1.42 

Happy 59th Singapore 🇸 🇬 National Day !

Anyone huat with 8659 first prize on 7 August 2024 ? 

Ang Pao before National Day!

huat lar everyone

dyodd

 

Timing is crucial when it comes to short selling. Stocks typically decline much faster than they advance, and a sizable gain in the stock may be wiped out with an earnings miss or other bearish development. Conversely, entering the trade too early may make it difficult to hold on to the short position in light of the costs involved and potential losses, which rise if the stock increases rapidly.  Short sellers commonly look for opportunities during the following conditions:

• Bear Market:  Traders who believe that &ldquo the trend is your friend&rdquo have a better chance of making profitable short-sale trades during an entrenched bear market than they would during a strong bull phase. Short sellers revel in environments where the market decline is swift, broad, and deep, to make windfall profits during such times.
• Decline in Fundamentals:  A stock&rsquo s fundamentals can deteriorate for several reasons&mdash slowing revenue or profit growth, increasing challenges to the business, and rising input costs that pressure margins. Worsening fundamentals could indicate an economic slowdown, adverse geopolitical developments like a threat of war, or bearish technical signals like new highs on decreasing volume.
• Bearish Technical Indicators:  Short sales may succeed when technical indicators confirm the bearish trend. These indicators could include a breakdown below a key long-term support level or a bearish moving average crossover like the  death cross. An example of a bearish moving average crossover occurs when a stock&rsquo s 50-day moving average falls below its 200-day moving average. A  moving average  is merely the average of a stock&rsquo s price over a set period. If the current price breaks the average, either down or up, it can signal a new trend in price.
• High Valuations:  Occasionally, valuations for certain sectors or the market as a whole may reach highly elevated levels amid rampant optimism for the long-term prospects of such sectors or the broad economy. Market professionals call this phase of the investment cycle &ldquo priced for perfection,&rdquo since investors will invariably be disappointed at some point when their lofty expectations are not met. Rather than rushing in on the short side, experienced short sellers may wait until the market or sector rolls over and commences its downward phase.

wait4opp      ( Date: 08-Aug-2024 08:03) Posted: Why still people keep shorting leh ? Dyodd

 

Why still people keep shorting leh ?

Dyodd

 

DBS Group Research analyst Ho Pei Hwa says the sharp correction after Seatrium&rsquo s results seemed &ldquo overdone&rdquo , as she thought the group&rsquo s &ldquo promising operational recovery&rdquo deserved some credit.

In her Aug 5 report, Ho noted that Seatrium conveyed a &ldquo commendable operating performance&rdquo with &ldquo decent&rdquo gross margins of 8%, excluding the provision for MH Wirth and the incremental $70 million provisions for onerous contracts recorded under the group&rsquo s cost of goods sold (COGS) line.

Ho calculates that Seatrium&rsquo s net margin is around 4%, with both provisions accounted for and the disposal gain of $35 million subtracted.

In her view, any sequential operational improvement would be closely tracked to assess Seatrium&rsquo s recovery progress since it has been loss-making for six years in a row.

In 2HFY2024, Ho expects any further provision risks to be lower.

&ldquo Management is committed to delivering its legacy contracts by 2HFY2024. Barring unforeseen circumstances, risks of further cost overruns shall diminish closer to the delivery date. We believe further provisions, if any, should be much less than in 1HFY2024,&rdquo she writes.

&ldquo While provisions for onerous contracts are part and parcel of a shipyard business, we find comfort in the knowledge that this batch of low-margin projects will be delivered in the next few months and reduce such lumpy income recognition,&rdquo she adds.

On the whole, Seatrium is set for growth as its integration has &ldquo progressed well&rdquo since the merger in March 2023 and its estimated annual cost savings of $300 million are achievable by the end of 2025.

&ldquo Management now aims to grow revenue at a five-year CAGR of 7%&ndash 10% to reach $10 billion&ndash $12 billion by 2028. This is backed by a decade-high order book of over $26 billion and robust demand for oil & gas (O& G) and renewable infrastructure,&rdquo she says. Furthermore, Ho points out that Seatrium seeks to build capabilities in carbon capture and storage (CCS) and new energies, potentially a long-term growth engine.

Ho has kept her &ldquo buy&rdquo call on Seatrium with a target price of $3. Her target price is based on an FY2024 P/B of 1.5 times.

CGS International analysts Lim Siew Khee and Meghana Kande have also kept their &ldquo add&rdquo call with a higher target price of $2.69 from $2.62. Their new target price is still based on a 2024 P/B of 1.5 times.

In their Aug 2 report, the analysts note that Seatrium&rsquo s &ldquo aggressive cost controls&rdquo have borne fruit in its 1HFY2024 results. Seatrium&rsquo s net profit of $36 million for the period surpassed the expectations of analysts, who anticipated a net loss of $30 million.

&ldquo In 1HFY2024, Seatrium saw an impressive 20% h-o-h drop in selling, general & administrative (SG& A) driven by cost-cutting measures, procurement synergies, and project execution efficiencies. Reported SG& A stood at 4.2% of sales (3.6% excluding depreciation, impairment losses on receivables, and property, plant and equipment or PP& E write-offs) compared to 5.3%/4.8% in 1HFY2023/2HFY2023, respectively,&rdquo they write.

&ldquo As Seatrium remains on track to achieve its target of $300 million in annual cost savings by end-FY2025, we forecast further improvements in the SG& A run rate to 4.1% for FY2024 and FY2025,&rdquo they add.

The CGSI analysts have also estimated Seatrium&rsquo s gross margin to be at 6%, excluding the MH Wirth settlement, compared to the group&rsquo s reported gross margin of 4%. Seatrium&rsquo s adjusted 1HFY2024 ebitda margin was 9.7%, 1.3 percentage points higher h-o-h.

&ldquo Seatrium is keeping its target of project-level gross margin in the mid-teens for both current new contracts and eventual adjusted ebitda margin,&rdquo they write. &ldquo We now expect 2HFY2024&rsquo s gross margin to be 7% and FY2024&rsquo s gross margin to be 5.6%.&rdquo

In addition to their higher target price, Lim and Kande have increased their FY2024 to FY2026 EPS by 4% to 238%.

Seatrium has also surpassed the expectations of Ada Lim from OCBC Investment Research (OIR), constituting 54.2% of her initial full-year forecast. Seatrium&rsquo s revenue also came slightly above Lim&rsquo s estimates at 51.5% of her full-year expectations. However, the group&rsquo s gross profit margin expansion fell slightly short of Lim&rsquo s expectations due to the MH Wirth settlement and likely due to some drag from its legacy projects.

In her Aug 2 report, Lim has kept her &ldquo buy&rdquo call as she likes Seatrium&rsquo s &ldquo steady cadence&rdquo of repair and upgrade contract wins. The analyst has also increased her fair value estimate to $2.64 from $2.60.

&ldquo Seatrium&rsquo s share price has experienced some correction following a request for information from the authorities pertaining to  Operation Car Wash, with the heightened risk of increased legal provisions likely to remain an overhang on the stock,&rdquo Lim notes.

At the briefing, Ong noted that the group is supporting the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department (CAD) in their investigations and has promised to cooperate with the authorities.

&ldquo Nonetheless, we think its fundamental industry outlook remains constructive and we see positive momentum especially for offshore platforms being contracted at improving margins in the current upcycle,&rdquo she adds. &ldquo However, investors may need to be patient as it will take time for Seatrium&rsquo s management to execute on its order book and deliver the performance necessary to restore market confidence in the stock.&rdquo

Citi Research analyst Luis Hilado has kept his &ldquo buy&rdquo call on Seatrium with an unchanged target price of $1.96 after its &ldquo operationally healthy&rdquo results. He also likes Seatrium&rsquo s long-term prospects of executing on a &ldquo substantial&rdquo order book.

Based on his estimates, Seatrium&rsquo s revenue and recurring/adjusted ebitda are in line at 48% each for FY2024. &ldquo The healthy order book momentum should drive a stronger 2HFY2024,&rdquo says Hilado.

As at Aug 6, shares in Seatrium closed at $1.42, 40.4% down year-to-date. The group also bought back another 1.35 million shares at $1.4473 apiece on the same day. Since the group obtained its share buyback mandate at its AGM on April 26, the group has bought 6.05 million shares from the market, bringing the total number of treasury shares held to 6.9 million.