Latest news with #CoastalContractsBhd
The Star
4 days ago
- Business
- The Star
Coastal well positioned to deliver long-term value
PETALING JAYA: Coastal Contracts Bhd is well positioned to deliver long-term value, backed by its strong cash reserves and a growing presence in shipbuilding and energy infrastructure. While short-term earnings for the integrated oil and gas services and energy infrastructure solutions provider are being weighed down by timing-related factors, the group's medium-term prospects remain intact. The group's robust financial footing stems from major contributions from its Mexican joint venture Coastoil Dynamic SA De CV (Cody), and proceeds from the sale of two offshore support vessels (OSVs). As a result, Coastal now holds approximately RM1bil in cash and cash equivalents, the majority of which is currently placed in short-term investments such as money market funds, said TA Research. This liquidity, the research house noted, 'provides room to pursue key growth initiatives'. Coastal's shipbuilding division is expected to drive earnings recovery, TA Research said. Three utility support vessels are currently under construction, with two scheduled for delivery in the second half of this financial year (2H25), and one in 1H26. The company also has three high-end OSVs in the pipeline, with staggered deliveries planned from 1H26 through 1H27. Beyond its core business, Coastal is exploring diversification into high-end hospitality, which would further boost its prospects. TA Research noted that the group is in discussions with luxury hotel operators to manage a resort development on Pulau Mabul. 'The capital expenditure for the first phase is estimated to be RM85mil and the room rate is expected to be more than US$500 per person per night,' the research house said. Given the project's timeline of one to two years and the fact that discussions are still ongoing, TA Research said it does not expect the hospitality segment to generate revenue until 2026. Meanwhile, Coastal's near-term financial results reflect a lull in project deliveries. For the first quarter ended March 31, the group reported core profit of RM17.7mil, which TA Research said was within its expectations at 22% of its full-year forecast, though it missed consensus forecasts at 15%. 'We anticipate earnings to grow from the shipbuilding division with two utility support vessels scheduled for delivery in 2H25,' the research house said. Quarter-on-quarter, revenue fell 58.2% to RM16.5mil, due to weaker contributions from shipbuilding and ship repair, while pre-tax profit dropped by 84.9%. Year-on-year, revenue declined by 7.1%, with pre-tax profit plunging 83.3% due to the absence of charter income from an OSV. TA Research maintained its 'buy' recommendation on Coastal with a target price of RM2.04 per share, based on a sum-of-parts valuation.
Yahoo
28-05-2025
- Business
- Yahoo
With 39% ownership, Coastal Contracts Bhd (KLSE:COASTAL) insiders have a lot at stake
Significant insider control over Coastal Contracts Bhd implies vested interests in company growth A total of 4 investors have a majority stake in the company with 56% ownership Institutional ownership in Coastal Contracts Bhd is 18% Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Every investor in Coastal Contracts Bhd (KLSE:COASTAL) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company. With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions. In the chart below, we zoom in on the different ownership groups of Coastal Contracts Bhd. See our latest analysis for Coastal Contracts Bhd Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index. Coastal Contracts Bhd already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Coastal Contracts Bhd, (below). Of course, keep in mind that there are other factors to consider, too. Hedge funds don't have many shares in Coastal Contracts Bhd. The company's largest shareholder is Ivory Asia Sdn. Bhd, with ownership of 28%. Fong Pang is the second largest shareholder owning 12% of common stock, and Andbank Asset Management Luxembourg SA holds about 9.4% of the company stock. To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making. Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage. While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group. Our most recent data indicates that insiders own a reasonable proportion of Coastal Contracts Bhd. Insiders own RM285m worth of shares in the RM722m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling. The general public, who are usually individual investors, hold a 14% stake in Coastal Contracts Bhd. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. We can see that Private Companies own 29%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company. While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Coastal Contracts Bhd has 2 warning signs we think you should be aware of. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
