Validated; results getting closer in line
Maintain Buy-awaiting catalyst. TOFF’s 3Q11 results validate our
RM1.4m net loss forecast for 2011. Cost management remains a
problem with earnings derived mainly from vessels supporting its other
loss-making segments, which caps earnings potential. Still, we look for
catalyst from its new PSVs and a resolution to losses at Citech. At this
juncture, TOFF trades at historical trough P/BV valuations, unwarranted
by its improving outlook over a 24-month period. Reiterate Buy call with
an unchanged target price of RM0.98, based on 0.8x book.
Maybank research (17 November 2011)
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