Valuation
- Where do you think the business will be in 3, 5 or 10 years time?
- Either privatisation to clean the books and get the ship running with less leakages.
- Steady business with long term contracts thats severely undervalued.
- What do you think revenue and profit margins will be?
Long term contracts have a standard inflation adjusted increase with 2.5-3.5% growth per year if the company can keep a healthy utilisation of over 80% we should see revenue grow with the increased in inflation. Profit margins are at a healthy 27.40% whilst competitors in the energy service field although bigger and more expansive in business segments only offer 7.90%, huge margin difference.
- What do you think the valuation multiple will be in the future?
Even with a slight increase to 4x PE vs current of 3.82x the company is severely undervalued (upside of 28.6% vs current price levels) and Malaysia's ship support business is poise to grow for the next few years until 2028 with no more ships commission to be built according to the Petronas Activity outlook.
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