UPDATED VERSION - PLEASE READ IT UNTIL THE END OF THE PAGE!
TAS OFFSHORE
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The company is principally
involved in shipbuilding and ship repairing activities. The services
are similar with Sealink Group. Interestingly, both companies are in
Sarawak. Details of the company's business overview, and products and
services are as below and link here: http://www.tasoffshore.com/products-services
TAS Offshore
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The
emergence of co-founder of Serba Dinamik, Datuk Awang Daud as major
shareholder in Sealink in late last year, has led to the share price
shot higher to 74sen from 45sen in the past two weeks in January 2020.
In fact, it started rally before that from 16sen since June 2019.
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Would
that mean potential earnings turnaround or strong jobs flow in Sealink
just like SCIB and Kpower after the founder of Serba Dinamik, Dato'Dr.
IR. Mohd Abdul Karim bought stake in SCIB and Kpower?
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Given
TAS offshore offers similar services to Sealink in Sarawak, TAS' share
price should also follow the rally of Sealink's share price to reflect
the potential brighter business outlook or maybe something else that can
be seen as a positive catalyst despite its net loss in 2Q20 (Sept - Nov
2019 period) results as reported on Thursday. It could be a blip only. Sealink also still reported net loss!
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TAS Offshore is optimistics with its prospects:
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On O&G prospects. According to Maybank-IB, 2020 to be equally exciting, if not better. The
O&G market is on a cyclical upward trend. Global sanctioning of
projects is rapidly increasing. Greenfield project commitments,
especially offshore investments have clearly picked up. Putting
things into perspective, oil price is expected to be at USD65/bbl in
2020, a level that would continue to instill confidence (i.e. capex/
sentiment). Maybank-IB is seeing positive developments across the value chain. As offshore activities rise, the OSV segments will benefit from stronger dayrates and utilization. This will likely boost TAS' orderbook for the construction of its OSVs for the O&G industry. Evidently,
Perdana Petroleum has benefited from the rising demand for its OSVs,
which primarily come from Dayang. FYI, Perdana also operates in Sarawak!
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On tugboat's prospects. Analysts
from Technavio, a global market research company, had pointed out that
the tugboat market will register a compounded annual growth rate of
close to 17% by 2022. The
tugboat market will remain attractive. Shipyards will also benefit from
tugboat contracts as the industry enters a golden period of tug
construction, driven by regulation and environmental concerns. Fifty-six
towage vessels were added to the global order book in the first six
months of 2019 in what is perceived as a bullish industry. These
new shipbuilding contracts boosts the global order book for tugs of
more than 20 meters in length to 297 vessels, keeping some shipyards
busy into 2020 and a few to 2022. These development augurs well for the group.
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While
Sealink has rallied to more than its NTA of 70sen and now at 68sen,
which seems fairly valued at 0.97x Price-to-NTA (Book value), TAS
offshore is still far undervalued and offers cheaper alternative to
Sealink. TAS Offshore's NTA is at 92sen and this means TAS' price-to-NTA
is only at 0.35x!!!
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A
little bird whispered to me that the current share price of 32.5sen
could rally to 53sen soon at least for the first phase! At 53sen, it
would imply 0.57x price-to-NTA! Still cheap though!
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From technical analysis angle,
it looks operators or insiders have already started accumulate the
stock aggresively in the last few days until yesterday despite the gap
down due to reported 2Q20 net loss! The operators or insiders took
opportunity from the selling (gap down) to accumulate more! Volume has jumped abnormally - stronger than average (chart below as of Thursday).
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This
can be seen in money flow index too! The uptrend in the money flow
actually started from Dec 2019 with small volume with nobody noticed it.
How to know the operators movement? Please read this book. It is well recommended!
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TAS'
share price had been trading sideways for a long time until it broke
above 28sen and 200-day exponential moving average (EMA), long-term
outlook last week. It has also now traded above 50-day EMA, mid-term
outlook and the share price is still above short-term outlook - 21-day EMA of 28sen despite the price gapped down yesterday. In fact, the gap down was occured in the consolidation range between 33.5sen and 29sen. Therefore,
the drop could be temporary and not a significant sell or bearish
signal. Thus, the share price will recover to fill in the gap down
anytime soon.
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There
is golden cross between 20-day EMA (purple colour) and 200-day EMA
(gold colour), which indicates a long-term bull outlook going forward.
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Next resistance stands at 36sen / 40.5sen / 48sen / 52.5sen
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Support stands at 28.5sen
