High  margin  contracts.  Technics' EPCC segment is the higher-margin  side  of  the business,  where  we  estimate  EBITDA  margins  to  be  about  24%  compared  to  18%  for Contract  Engineering. With the  carve-out  of  the  Norr  Offshore  Group  (NOG)  ongoing,  we see a greater part of Technics' business being in EPCC, pushing up overall margins.

No  change  to  estimates.  As these contracts form part of our order win assumptions, we are holding our estimates steady. We continue to expect 16% topline growth for the EPCC segment this year. However, because of the deconsolidation of NOG and their addition into associate  income,  we  are  expecting  a  25%  overall  revenue  fall  in  FY13F.  Bottom  line growth is expected to be slightly slower this year at 5.5% due to the  dilution of NOG, but this should accelerate to 10.5% in FY14F as the Vietnamese yard ramps up operations.

Maintain  Buy  with TP  SGD1.15. We maintain our Buy call with a TP of SGD1.15, based on  12x  FY13F  EPS.  At  the  current  price,  Technics  is  yielding  5.2%  based  on  our  6¢ dividend expectation. We are awaiting 1Q13 results release tonight.

Source: OSK