Wednesday, March 2, 2016

Starburst kept at ‘buy’ by OCBC with 39 cents fair value

OCBC is maintaining its “buy” recommendation and 39 cents fair value estimate.

In a Tuesday note, OCBC says Starburst Holdings, the builder of shooting ranges, is likely to bounce back after a weak performance in 2015.

In FY15, revenue dropped 59.5% and gross profit plunged 82.4% last year.

Starburst management says they haven’t seen any cuts in the defence budgets in the Middle East because of the rout in oil prices.

“We believe the increasing threat of terrorism may likely even see budgets prioritised for defence related projects,” says lead analyst Eugene Chua.

Within Southeast Asia, the recent bombing in Jakarta as well as the threat of terrorist attacks in and around Kuala Lumpur will likely increase the need for government to spend on defence training facilities, adds Chua.

Starburst closed at 30 cents on Tuesday.

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