Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: OCBC
Company Name: KEPPEL CORPORATION LIMITED
Research House: OCBC
Keppel Corp. (BN4.SG) is off 0.4% at $11.32, despite announcing contracts for two newbuild jackup rigs from Clearwater Capital for US$360 million ($462.1 million); it also announced the termination of a US$152 million drillship upgrade contract from Noble.
DMG says the cancellation with Noble is “not a cause for concern” as it was due to a change in contract status with its end client, Petrobras. The house keeps its Buy rating and $12.00 target on Keppel, and estimates net outstanding orderbook rose $270 million to $5.5 billion with deliveries stretching up to end-2013.
DMG says the cancellation with Noble is “not a cause for concern” as it was due to a change in contract status with its end client, Petrobras. The house keeps its Buy rating and $12.00 target on Keppel, and estimates net outstanding orderbook rose $270 million to $5.5 billion with deliveries stretching up to end-2013.
Separately, OCBC notes that Clearwater is an investment firm, not a rig operator or oil company: “This is the second announcement by Keppel relating to orders secured by an investment firm in the last three months and underscores the confidence the investment community has in the offshore rig market.”
The house maintains its Buy rating and $12.50 fair value estimate. SembCorp Marine (S51.SG) is also down 0.4% at $5.12, perhaps reflecting Friday's slight drop in oil prices, which normally weighs on rig builders.
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