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Tuesday, 6 July 2010

ES Group (Holdings) Limited

ES Group (Holdings) Limited (the "Company" or "Group") is a marine and offshore group engaged or involved in new building, conversion and repair of ocean-going vessels. Their customers are primarily shipyard operators in Singapore involved in the construction and repair of seaborne vessels, offshore rigs and semi-submersibles. They build, convert and repair a wide range of vessels, such as tugs, barges, rigs, offshore support vessels, oil tankers and cargo ships.
The Group's business can be categorised into two main segments as follows:
New Building and Conversion

They fabricate steel structures for new buildings and vessel conversions for customers whom are reputable shipyard operators in the marine and offshore oil and gas industries, such as Sembawang Shipyard, Keppel FELS and ST Marine. They also have experience and technical expertise in (i) building a wide range of specialised and customised vessels such as tugs, barges, jack-up rigs, offshore support vessels, oil tankers and cargo ships, as well as (ii) carrying out FPSO, FSO and FSU conversions.

They also have the capability to undertake repairs for a wide range of offshore vessels and barges, both afloat and drydocked.

Financial Highlights

Revenue for the Group grem from S$40.8m in FY2007 to $52.7m in FY2009. The profit also grew from $3.9m to $8.3m during the same period. Based on the post-ipo shares, the EPS was 4.5 cents for FY2009 and that translate into a historical PE of 5.3x.

The Company is placing 21.2m New Shares at $0.24 each to raise funds for ex pansion. The market cap post listing is $33.9m. The offer will be via placement and will close on 7 July 2010 at 12pm. The Company also intends to pay out 30% of its net profit as dividends for FY2010.

Personally I think this company has much better prospects than several other Catlist listings which we have seen so far. The fact that it is prepared to pay a 30% dividend despite being a "Catalist" listing also indicate that the management is confident of its 2010 prospects and cash position. I would have given this stock a better rating but unfortunately, it is not for public subscription. Whilst the prospectus doesnt shed much light with regards to 2010 performances or budget, assuming the company will perform credibly or much better than FY2009, a fair value of 6-8x PE will indicate a fair value of 27 cents to 36 cents.

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