Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Research House: RBS
News that Keppel has bagged another jack-up contract, valued at US$195 million ($247 million) from Mexico, is also likely supporting shares of both companies, as it highlights the rosy demand outlook for their high-spec jackup rigs.
RBS keeps Keppel at Buy with a $13.50 target price, but prefers SembMarine, rated Buy with a $7.00 target, as “SMM, the pure play, tends to outperform when order momentum improves; it has underperformed KEP over the last month by over 10%; and SMM is more competitive in near-term bids now that Keppel’s delivery times are stretched.”
Company Name: SEMBCORP MARINE LTD
Research House: RBS
Keppel Corp. (BN4.SG) leads percentage gains on the STI, up 2.6% at $12.00, with peer SembCorp Marine (S51.SG) the second biggest gainer, up 1.6% at $5.72, as both rigbuilders outperform again, enjoying their status as perceived beneficiaries of the current high oil prices.
News that Keppel has bagged another jack-up contract, valued at US$195 million ($247 million) from Mexico, is also likely supporting shares of both companies, as it highlights the rosy demand outlook for their high-spec jackup rigs.
RBS keeps Keppel at Buy with a $13.50 target price, but prefers SembMarine, rated Buy with a $7.00 target, as “SMM, the pure play, tends to outperform when order momentum improves; it has underperformed KEP over the last month by over 10%; and SMM is more competitive in near-term bids now that Keppel’s delivery times are stretched.”
It notes, Keppel’s win brings YTD orders to $3.8 billion, 74% of its 2011 assumption while SMM has YTD received orders equivalent to 7.5% of its 2011 assumption of $4.8 billion.
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