Will Triyards continue to outhustle sector headwinds?

It’s the sector’s second best performing stock.

Singapore’s offshore & marine stocks are undoubtedly whirling in an inescapable maelstrom, and finding a modestly performing firm is rare.

This is the case of Triyards, as it continues to book healthy earnings amidst industry headlinds, on back of a US$564m net order book, according to a report by OCBC.

“At a time when many offshore & marine stocks are down 40-50% YTD, Triyards Holdings fell a more modest 15% YTD, making it the second best performing stock in the sector, after Yangzijiang Shipbuilding,” OCBC said.

According to OCBC, the outperformance could be attributed to its relatively resilient earnings as it executed on its orderbook, booking a 2% growth in its profit for 2015.

“This was also not at the expense of its balance sheet – net gearing fell from 0.5x in FY14 to 0.3x in FY15. … and continued order wins Encouragingly, the group also continued to win orders throughout the year, including five liftboats and other types of vessels like high speed craft and chemical tankers,” the report said.

Meanwhile, OCBC said Triyards’ diversified net order book which comprises nine liftboats and a good mix of other kinds of vessels bodes well for the company, as the liftboat is still a relatively bright spot in the current tough environment, while the other products (e.g. fast craft vessels) are not dependent on the oil and gas industry.

“Looking ahead, Triyards expects to spend ~US$20m on capex. Spare capacity in its three Vietnam facilities range from 30-35%, and the group has also utilized neighbouring yards for certain work during peak seasons,” OCBC added.

“We remain positive on the group’s prospects as it has established itself as a specialist liftboat provider in the region, though we note increasing competition from other yards as they seek to enter the liftboat space,” OCBC said.

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