Jaya Holdings
BUY S$1.63 FSSTI : 3,153.94
Price Target : 12-month S$ 2.07 (Prev S$ 2.15)


Benefiting from the offshore boom
Story: The outlook for Jaya is strong and its unique
business model, where it is both a shipbuilder and a fleet
owner, will enable it to maximize opportunities where
demand for offshore support vessels is strong.

Point: Jaya has a newbuild program consisting of 65
vessels in various stages of completion till FY2010.
Currently, majority of the smaller sized vessels are
outsourced to the Chinese yards with the larger and
higher value added vessels built at its Singapore and
Batam yards. Jaya's yard in China is being progressively
upgraded and will eventually take on more newbuild
projects, thus reducing its reliance on third party yards.
Good visibility to earnings for at least the next three
years. Out of 21 vessels to be completed in FY09, four
have been committed for sale and another four for
charter. The number of vessels committed - either for
sale or charter - will rise as the completion date nears.
Both newbuild and charter rates are rising and this will
bode well for Jaya.

Relevance: Valuations are undemanding, with Jaya
trading at a discount to peers. In addition, Jaya offers an
attractive yield of 7-8%. 1H08 dividend was 5.5Scts and
we are expecting Jaya to pay out at least another 6Scts
in 2H08. Maintain Buy, with our target price slightly
lowered to S$2.07 (from S$2.15), pegged at 12x PE for
shipbuilding and 15x PE for chartering.

Tat Hong Holding

(See attached file: corp action-04-jun08.doc)

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