Wintermar Top line Above Expectation, net profit in line
WINS’ 1Q13 top line was slightly above our expectation given stronger contribution from the re-chartering division, while its bottom-line was within our and consensus expectations, making up 25% of our and consensus FY13 bottom-line estimates. We see the 11.4% share price hike since 19 April and its trading volume gain as positive reactions to the encouraging 1Q13 results. We keep our earnings forecasts intact and maintain our BUY call and IDR640 TP.
Strong re-chartering growth
WINS’ 1Q13 revenue climbed 0.2% q-o-q and 44.9% y-o-y to USD39m, backed by strong re-chartered vessels growth as industry demand for higher-value offshore support vessels (OSV) picked up. The group’s 1Q13 revenue for the owned-vessels segment grew 8.9% q-o-q and 10.6% y-o-y to USD18.5m, driven by fleet expansion in 2011 and 2012. Meanwhile, 1Q13 gross profit surged 23.6% y-o-y but margin declined to 28.9% from 33.8% in 1Q12, due to strong showing from the re-chartering division which has thin margins but is also asset light.
New vessels to arrive
WINS took delivery of three mid-high tier vessels in 1Q13, which were not fully utilized in the quarter. Note that WINS plans to add eight vessels in its FY13 fleet portfolio, expects to receive another three to four vessels in 2Q13. We see that the cabotage has been strict this year for several big project tenders, leaving opportunities for WINS to win more high value vessel tenders. Should this be realized, we may revise up our USD50m capex assumption this year.
Strong backlog
WINS has USD201m worth of contracts on hand as of 31 March 2013, reflecting the strong high-tier OSV demand in the oil and gas (O&G) industry.
Maintain BUY
WINS is currently trading at a cheap valuation of 7x and 6x 2013 PER. An attractive PEG is pegged at 0.4x this year. The company’s consistent earnings growth since its IPO, coupled with the positive industry and company outlook, should warrant a valuation re-rating. Hence, we maintain BUY call and IDR640 TP, implying a 10x 2013 P/E, which is justifiable in our view.
