Business

Brokers' take

Compiled by Jamie Lee, The Business Times

TRIYARDS HOLDINGS | HOLD
TARGET PRICE:
$0.345
MARCH 22 CLOSE: $0.235

OCBC INVESTMENT RESEARCH, MARCH 22

With Ezra Holdings and its subsidiaries EMAS IT Solutions and Ezra Marine Services (Ezra Chapter 11 entities) voluntarily filing a petition for reorganisation under Chapter 11 in the US, and EMAS Chiyoda Subsea and its subsidiaries (ECS Chapter 11 entities) voluntarily filing a petition for relief under Chapter 11, Triyards Holdings has issued a statement.

As at Nov 30, 2016, the aggregate amount of inter-company receivables and payables owing from the Ezra Chapter 11 entities and the ECS Chapter 11 entities to Triyards was about US$1.4 million (S$1.9m) and US$1.6 million, respectively.

Triyards is also liable for up to US$30 million in a joint bank facility under a corporate guarantee with Ezra, and there is also an existing banking facility with US$8.5 million outstanding in which Ezra and Triyards jointly provided corporate guarantees.

At this stage, Triyards is unaware of any actions by the financial institutions involved in the banking facilities as a result of the Chapter 11 filing, and Triyards does not have a going concern issue.

KEPPEL CORPORATION | NEUTRAL
TARGET PRICE:
$6.20
MARCH 22 CLOSE: $6.72

CITI RESEARCH, MARCH 21

Keppel announced that it has entered into a heads of agreement with Borr Drilling Limited to novate the construction contracts of the five jack-up rigs being built for Transocean to Borr.

We view this as a positive for Keppel from a liquidity management perspective, as Borr's agreement to make a down payment of US$275 million, coupled with the accelerated deliveries of the first three rigs, would aid Keppel's operating cash flows and may potentially reduce net gearing marginally.

The prospects of Keppel O&M are still dampened by the lack of significant newbuild catalysts, along with the risk of a depleting backlog.

CHINA JINJIANG | ADD
TARGET PRICE:
$1.10
MARCH 22 CLOSE: $0.86

CIMB RESEARCH, MARCH 21

A hidden jewel in China's waste treatment industry, China Jinjiang (CJE) is the largest waste-to-energy operator in China, but seems overlooked by investors.

It is a beneficiary of the government's push for waste incineration. We forecast CJE's net profit to grow at 13.5 per cent from FY16 to FY19F, driven by the WTE capacity expansion. We initiate coverage with an "add" rating and a target price of $1.10. Strong earnings growth and ongoing expansion of the WTE portfolio are catalysts.

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