Keppel Corp rises on $485.7m contract win

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
Research House: DMG

Shares of Keppel Corp (KPLM.SI), the world’s largest oil rig builder, rose as much as 2.4% on Thursday after its unit Keppel FELS secured a contract worth around $380 million ($485.7 million) from Transocean to build two high-specification jackup rigs.

At 9:19 a.m., Keppel Corp shares were up 1.9% at $11.80 on a volume of 5 million shares.

DMG & Partners Research said the latest contract has lifted Keppel Corp’s year-to-date new order wins to $3.7 billion, and accounted for 57% of the brokerage’s full-year order forecast of $6.5 billion.
 

“We expect most of the jackup options to be taken up by the customers because new high-spec jackup rigs are getting higher day rates versus older rigs,” DMG said in a report.

“Pricing power on new orders is slowly shifting to the yards as available capacity is taken up,” the brokerage added.

The brokerage maintained its buy rating and $13.94 target price on Keppel Corp.