RHB Research has lowered TAS Offshore Bhd’s net profit forecast for the financial year (FY) 2015 by eight per cent.
This followed a recent discussion with TAS management, it added.
However, RHB Research has maintained a “buy” call on TAS due to its fundamentals, underpinned by growing demand for offshore support vessels (OSVs) in the oil and gas sector, coupled with a healthy order book.
“In view of our lower earnings growth expectation, we revise down our forecast FY15 price earnings to 9.5 times from 12 times. We also reduce its fair value to RM1.60 from RM2.19 as well,” it said in its note.
TAS unit TA Ventures (L) Ltd has signed a joint-venture (JV) agreement with a China partner, Chan Baihang, to build and sell OSVs.
The estimated cost of the JV is about RM120 million, where TAS will contribute 60 per cent, and the remaining 40 per cent by Chan, a businessman from Guangdong, China.
“As the company boasts of a prudent management team, it is carefully exploring opportunities in the industry. We believe its decision to enter into a JV with its China partner is a positive move,” RHB Research said.