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PVS [BUY +22.8%] - Initial contracts awarded to kick off PVS’s recovery cycle - Update

We edge down our target price by 1.5% on a lower 2017 earnings forecast, but maintain a BUY recommendation with total return of 22.8%. 2017 should be a bottom with EPS dropping 33.5% vs 2016 due to dilution from upcoming capital raising. Lower expected compensation for Floating, Production, Storage & Offloading (FPSO) Lam Son also outweighs initial Mechanics & Construction (M&C) earnings stream from the Red Emperor project. We are optimistic about 2018 with plenty of jobs from Red Emperor