Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Research House: CIMB
“We believe both Singapore yards stand equal chances of bagging some contracts given their track records and relationships with the national oil company. A decision on the newbuild orders is likely to be made soon. The tender price is estimated at US$180 million ($228 million) per rig.”
Company Name: SEMBCORP MARINE LTD
Research House: CIMB
SembCorp Marine (S51.SG) is up 2.2% at $5.62, leading gains on the STI with Keppel Corp. (BN4.SG) +0.3% at $11.72. Both stocks are continuing their recent good run (+3.6%, +2.3% last week respectively) as the order flow outlook for jack up rigs remains robust.
CIMB notes, the oil & gas newspaper Upstream Friday reported that Saudi Aramco is considering orders for up to five jack-up rigs to replace part of its ageing chartered fleet (the house says more than 60% of the 21 rigs operating for Aramco are around 30 years old).
CIMB notes, the oil & gas newspaper Upstream Friday reported that Saudi Aramco is considering orders for up to five jack-up rigs to replace part of its ageing chartered fleet (the house says more than 60% of the 21 rigs operating for Aramco are around 30 years old).
“We believe both Singapore yards stand equal chances of bagging some contracts given their track records and relationships with the national oil company. A decision on the newbuild orders is likely to be made soon. The tender price is estimated at US$180 million ($228 million) per rig.”
It keeps its FY11 order-win assumptions for SMM, its preferred pick, rated Outperform with a $6.38 target, at $10.8 billion. For Keppel, rated Outperform with $15.00 target, it expects $7.0 billion of orders.
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