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PVD - OUTPERFORM - Higher-day rates and more hired rigs lead to jump in drilling-related services, strong 1Q - Update

We upgrade our rating from MARKET PERFORM to OUTPERFORM with a revised target price of VND95,700. All 5 of PVD’s own rigs will be under contract for entire FY14, with 3 to be renewed within 1H with higher day-rates. Additionally, 6 rigs are under hire in 1Q14 vs. 3 in 1Q13. However, GPM is in the single digit for hired rig contracts but the new contracts have a positive effect on related and well-technical services (~27% GPM), which saw a 85% jump in revenues.