0712 GMT 15 June [Dow Jones] STOCK CALL: STX OSV's (MS7.SG) string of high-value vessel orders secured year-to-date is encouraging, Citigroup says, adding it raises the possibility full-year wins could exceed the house's estimates by 20%-30%. The latest NOK1.4 billion contract for an offshore subsea construction vessel raises year-to-date order wins to about NOK5.6 billion, or about 60% of its full-year estimate, Citigroup says. It notes STX OSV also entered a letter-of-intent to construct a platform supply vessel, with a firm contract expected by end-June."Amid much second-guessing over the prospects of a general offer at premium/discounted valuations (arising from sale of parent company's 51% stake), the latest contract announcements are a timely reminder of STX's attractive fundamentals as a leading, but inexpensive (7X-8X forward P/E), builder of high-end offshore vessels." It says risk-reward is appealing, but near-term underperformance is possible in the absence of a takeover or if more severe de-risking emerges. It keeps a Buy call with a S$1.90 target. The stock is up 4.2% at S$1.48.
- Leslie Shaffer, Dow Jones Newswires