Thoresen Thai Agencies (TTA.BK/TTA TB): Gradual improvement over the long term

Thoresen Thai Agencies (TTA.BK/TTA TB): Gradual improvement over the long term
We revised up our FY12 net profit forecast for TTA to Bt390mn from Bt248mn as its energy business is recovering faster than earlier expected. Our FY12 target price was revised up to Bt20.00, from Bt17.60, but we maintain a rating of Neutral as there are no catalysts to drive the share price in the near term. The overall tone at last Friday’s analyst meeting was neutral. The performance of its transportation business in FY12 (October – September) is expected to be flat due an expected oversupply situation in the bulk shipping industry next year. Nevertheless, its energy business is expected to improve next fiscal year as the utilization rate began to recover in FY3Q11. For next quarter, we expect TTA to post weaker earnings QoQ as i) subsea business is entering a slow season during October to February and ii) Unique Mining Services (UMS.BK/UMS TB) suspended operations at its Ayutthaya factory during October to November due to the flood.

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