Brokers Hargreave Hale gave the following Valuation for HMY

VALUATION
The nearest comparisons to this Group are Sondex, trading on a current year multiple of 14 and Weir Group which typically trades on multiples of 12 plus. We would argue that Hamworthys prospects are brighter than both these companies in view of the strong order book and the global positioning. Fully taxed earnings of 13p this year and 16.5 p for the 2005/6 end March, suggests a current year PE of 9.9x and a prospective PE of 7.8x. There is a prospective yield in excess of 4%. If trading on a similar PER to Sondex the shares would be valued at in excess of 180p. We would argue that a premium to Sondex is justifiable, in particular because of the potential ramp up to sales as a result of the new product pipeline now gaining client acceptance in what is in any event one of the fastest growing markets in the world.

"Shares" Article relating to Hamworthy (HMY) posted below for info.

With a following wind these shares should double over the next year or so.

Some catty folk in the City say the flotation last month by Collins Stewart
could have been handled better, i.e. at a higher price. It was certainly over
subscribed but the rating is half that of similar oil sector service companies
including Sondex.

Sounds good to me.

MS

This article from another place back on the 2nd November has had me researching these guys - gives a very good overview and with todays news I have gone in big.

Looks to have a long way to go yet.

Hope it is of some use.

Buy Hamworthy at 171p
Rob Cullum of TrendWatch.co.uk
When you think of big, successful, world-class engineering companies, what springs into your mind? Germany, perhaps? Or maybe one of the giant Far East trading houses such as Hyundai, Mitsubishi or Hitachi. Despite our proud post-industrial revolution heritage, you don't normally think of engineering and Britain in the same breath, except perhaps for Rolls-Royce.

But we do have many world-class engineering businesses. One of them surprisingly only floated on AIM in July. Even more surprising, it's a business that the average person on that other engineering marvel, the Clapham omnibus, has probably never heard of.

The company is Hamworthy. Its speciality is marine engineering, with the emphasis on fluid handling. So, for example, it makes pumps and equipment for getting crude oil and natural gas onto and off tanker ships. It also makes systems for handling dry cargoes. It makes the refrigeration systems for liquid petroleum gas (LPG) and liquid natural gas (LNG) carriers. It's the world's leading manufacturer of marine sewerage treatment systems, fitted to ferries all the way up to the world's biggest cruise liners. It supplies specialised equipment to military naval fleets worldwide, where requirements in terms of reliability, shock resistance and fire resistance are especially onerous. It supplies equipment for all types of in offshore oil exploration, including seismic vessels, drill vessels involved ships, oil rigs, shuttle tankers and pipe-laying craft.



The company has major establishments in the UK, Norway, Denmark, Singapore and a modern assembly plant in China, which helps to keep its products highly competitive.

Given the recent flotation on AIM, it may come as a surprise that the company's history goes back nearly a century, to 1911. It was acquired by engineering conglomerate Powell Duffryn in 1962. Powell was the subject of a private equity takeover in 2000. Its owners refloated Hamworthy in July via a placing at 109p.

These days, you should never be put off by the fact that this is an AIM company. Many AIM companies are bigger than their fully listed brethren. Hamworthy is capitalised at 60 million pounds and rising. Its annual turnover has risen from 64 million pounds in 2002 to almost 100 million pounds now; pre-tax profit rose from 4.0 million pounds to 5.8 million pounds over the same period and in May its order book stood at a record 98 million pounds.

There are several drivers for this growth:

The ever-tightening environmental, safety and noise regulation. The days when ship operators could treat the sea with contempt as their private cesspit and waste oil dump have long gone.

The demand for oil and gas transportation is growing.

The market for cruise tourism is expanding.

There is a growing trend to utilise FPSOs (floating production, storage and offshore loading) vessels, which are full of the sort of equipment in which Hamworthy specialises.



Furthermore, thanks to the extreme conservatism of the marine industry, there are serious barriers to entry for would-be competitors. Given the potential for disaster at sea involving explosive cargos, it isn't surprising that Hamworthy's customers often require extensive lists of user references and evidence of years of successful operation before they'll even consider ordering a particular marine system.

Despite that fact, this is a fragmented industry, giving Hamworthy plenty of opportunities to grow via acquisitions as well as organically.

This combination of a long history, major growth drivers and barriers to entry has resulted in Hamworthy becoming the world's number 1 in deepwell pumps (for pumping gas and oil cargoes), with 95% of the global market. It's also no.1 in gas reliquefaction systems and in water treatment systems. It's the global no.2 or no.3 in most of the other products that it supplies.

Its new gas reliquefaction system could turn out to be a real winner. Exxon and Conoco are currently testing it. Some gas boils off from the LNG cargo during the voyage. Currently, liquid gas carriers use this boiled-off gas to power steam generators to power the vessel. This is actually an inefficient use of energy. Hamworthy has developed an on-board gas reliquefaction system, enabling the ships to use more efficient, low maintenance diesel engines. The reliquefaction system costs 2 million pounds - 5 million pounds but should save 3 million pounds p.a. for each LPG vessel.

We don't yet have the benefit of broker research for this company, though no doubt that will change quite quickly, given the attention the flotation attracted from institutional shareholders (the placing was oversubscribed). House broker Collins Stewart reckons that profits will rise from 5.8 million pounds to 7 million pounds this year and to 9 million in 2005-06. If correct, this puts the shares on a lowly p/e of under 7 for 2005-06. We'd expect to see a share like this rated at more like 12 at the very least.

It also suggests that the company was floated too cheaply. This is the earliest opportunity we've had to recommend the share, which has performed strongly since flotation. There's a window of opportunity here to pick up the share while they still look seriously underpriced. Don't delay too long, though. At the rate the shares are rising, the window won't be open that much longer. BUY

Key Data

EPIC: HMY
NMS 5,000
Spread 169p - 173p
Market Cap 62.16 million pounds

The 100k sell looks like a buy to me. The buyers are still piling in.

Are we all holding. I know I am.

MS

I'm looking towards the 300 point mark at some stage next year!

Now that would be good.

MS

Yup superb news today and fought off some heavyweights I hear to win the contracts.

cheers GF.

Greetings colleagues,
Great news today and happy to hold HMY - but am I the only one to notice over 1,000,000 shares sold close to the bell today? What's that all about then?

Not sure PL, but for sure the trend is up. Just how far are we going up is what we all would like to know.

cheers GF.

Up again, I expect to see something in shares and the chronicle on this one this week.

cheers GF.

Whats the brokers target?

MS

Not sure yet MS. Ps, by the way just have a look at the article I have posted on Woolfson, could be MASSIVE.

cheers GF.

Do those last 3 big entries look like buys or sells?

Hard to say, expert, I doubt if the MMs will be taking that volume of stock on to their books unless they know someone who wants it badly. Has anyone thought that Hamworthy might be vulnerable to a bid? Small cap company with a world-leading position in a growing technology. They would make a nice mouthful for one of the majors. No ramp intended, but could these large put-throughs just be a bit of stakebuilding? Anyone else any views?

Its already being looked into. Patience please. I can give no more.

cheers GF.

It looks like it may shoot up nicely today. The market makers are short of stock.

HMY must soon come into somebody's sights. They are a well established company and their products are very specialised ( I know because I've been involved in the shipping of gas ) and the gas market is booming. There are no major oil fields coming on line but plenty of gas - there are also mature oil fields where the gas has remained basically untapped. The oil majors are all involved in big building programmes to ship gas and the environmental benefits versus other fuels can only help

Good points there Jim.

cheers GF.

November 8, 2004

LNG Producers Seek Economies Of Scale In New Super Tankers

By Martin Clark
______________________________________________________________


The growth of the LNG industry in recent years shows no signs of letting up with demand projected to reach around 7-8 per cent a year over the next decade. In fact, natural gas in all its forms will meet 25 per cent of the worlds total energy needs by 2020. Numerous gas liquefaction plants are now under construction and more are on the way. As well as established suppliers such as Malaysia, Algeria and Brunei major players now include Oman, Trinidad & Tobago, and, from December this year, Egypt.

The growth of the sector has underpinned the demand for liquid gas transportation services, an area that is becoming increasingly of interest to international oil companies, notably BP, seeking control of the entire LNG chain. Global carrying capacity is set to double in the next few years as more LNG takes to the seas with new liquefaction plants and re-gasification terminals being built both in the Atlantic Basin market - which basically groups the European and US east coast markets - and in the Far East; long-term LNG consumers include Japan and South Korea.






The current world LNG fleet consists of around 166 vessels with a total carrying capacity of some 19.5 million cubic metres. These will be joined by a further 105 vessels now under order with a capacity of 15.5 million cubic metres. But it is the rate of growth that is most noticeable. A staggering 64 new LNG vessel orders have been placed during 2004 alone as newcomers and established shippers gear up for a market with high-growth potential. If natural gas is cooled to -260 degrees Fahrenheit it turns into a liquid and shrinks to one six-hundredth of its volume allowing it to be shipped more easily.

Another major factor influencing demand is the gradual opening of the US market. Although there is still resistance to imported LNG, largely on environmental grounds, dwindling domestic reserves mean that American energy companies are finally waking up to the need for foreign gas supplies. Countless re-gasification projects have been proposed - including the worlds first offshore re-gas terminals - but red tape and fierce grass roots opposition continue to halt many initiatives in their tracks.

The dynamic Atlantic Basin market is currently served by African and Latin American suppliers but is slowly opening up to Gulf producers, like Qatar and Oman. The equally robust Far Eastern market is served by Asian producers like Malaysia, Indonesia and Brunei, and increasingly Australias North West Shelf project. These, plus others like Russias Sakhalin LNG project, are competing strongly for business in the emerging US west coast market.

With demand rising sharply - China too is set to become a major importer by 2006 - LNG supply is also set to expand. As well as a spate of export projects in relatively new hydrocarbons territories, such as Equatorial Guinea and Angola, the worlds major gas provinces such as Russia and Iran are also set to enter the fray. Qatar - which sits on the some of the worlds largest gas reserves with its North Field - is ramping up production at both the RasGas and QatarGas terminals. These multi billion dollar upgrades will make the Gulf state the largest LNG supplier in the world. The QatarGas II expansion - a joint venture between ExxonMobil and Qatar Petroleum - will also mark the development of a new era of super size carriers, in order to capitalise on economies of scale. The new fleet of vessels - that will take gas from Qatar to a new receiving terminal to be built in the UK - are likely to be the largest ever seen, with a carrying capacity of around 200,000 million cubic metres.

The largest LNG ships on the seas at the moment have a capacity of around 165,000 million cubic metres. This is likely to be the first step however in the move to vessels with a capacity of 250,000 million cubic metres, which will make the transportation of gas from the Gulf to the US more viable in the coming years. Many of the import projects proposed in the US - assuming they get the green light - will be constructed to accommodate this new generation of super tankers.

Oil companies have moved swiftly to take a position along the LNG value chain, with a stake in the upstream reserves, the liquefaction plant and re-gasification process. American firms such as ChevronTexaco and Marathon Oil are developing their west African export projects in conjunction with new import capacity in the US. New LNG export facilities in places like Angola, Equatorial Guinea and Nigeria are largely dependent on the successful opening of the US market.

Among the current leaders is BG Group, currently the major supplier of LNG to the US market, with a stake in both the export and import side of the business. It is also eyeing a larger share in the transportation market ordering a fleet of new vessels earlier in the year to service its growing global LNG business. More recently, BP - another leading player in the LNG chain - placed an order for a further four, and possibly eight, LNG vessels to add to its existing fleet. The company is using the vessels to capitalise on short term trading opportunities in the evolving LNG market. In the past, ships were employed to serve on one project, between liquefaction plant and receiving terminal, a kind of bus route.

At the same time, there is increasing competition among the worlds ship builders in the LNG shipping market. Typically, this has been dominated by the big Korean yards, Daewoo, Samsung and Hyundai, as well as Japan, but new entrants are starting to pick up some business. China is well positioned to provide a cost competitive ship building service - its Hudong yard has already taken its first LNG orders. The countrys first LNG plant - a joint venture between BP and the China National Offshore Oil Company - is due to open in Guangdong province in 2006. Three other receiving terminals have been given the go ahead by the authorities. With Beijing looking to control as much of the LNG supply chain as possible into the country China is likely to become a major provider of vessels in the next decade. Other countries, including Iran and Poland, are also looking for a slice of the LNG shipping construction business.

Right on cue - another 1,000,000 shares go through the market at the close. All sales at 200p. There must be a huge buy order out in the market. If this isn't stakebuilding before a bid then I'll sell my shares - for 3 each! LOL.