PVS - Catalyst from key Oil & Gas projects
The M&C segment will see falling revenues as there are not many new projects to be recorded However, the gross margin will improve thanks to the contribution of Sao Vang - Dai Nguyet – an offshore project. For 2018, some PVS businesses will incur losses such as Seismic, GEO Survey while other ones are suffering from low service prices due to the fierce competition. As a result, Rong Viet Securities believes that 2018 will not be a “bright” year for the company.
In the long term, oil prices are expected to continue to rise, creating favorable conditions for the key oil & gas projects. Therefore, the company’s business is anticipated to benefit from that trend. The maritime dispute in the South China sea, however, is a risk for the activities of the company.
We have a BUY on PVS, based on a valuation of VND22,500 per share and VND700 of cash dividend, 39% higher than the closing price in 30/5/2018. In our opinion the drop in the stock market provides an opportunity for investors to buy this ticker.
PetroVietnam Drilling & Well Service Corporation is a Vietnam-based provider of oil and gas drilling services. The Company's operation is organized under three segments, including Drilling Services segment, which leases oil rigs and performs drilling services on a contract basis; Trading segment, which distributes equipment and supplies for oil drilling businesses, and Other Services segment, which provides diversified related services, such as oil well surveying and mapping, mud logging, oil spill containment, human resources outsourcing and project management.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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