OCBC raises Keppel Corp to $13.92; Keeps buy

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

OCBC Investment Research has raised its target price for Keppel Corp (KPLM.SI), the world's largest oil rig builder, to $13.92 from $13.24 and maintained its buy rating.

Keppel Corp has secured $4.6 billion worth of offshore and marine orders so far this year, versus $3.2 billion for the whole of 2010, and will likely clinch more orders over the course of the year, OCBC said.

The brokerage said Keppel Corp is staying ahead of competition due to its global yard network, broader product range and measures to raise productivity.

There is potential for margins to remain strong as prices for jackup rigs look set to rise due to decreasing yard slots and continued order momentum, OCBC said, adding that repeated rig deliveries may lead to productivity gains.

OCBC said its higher target price for Keppel Corp also took into consideration a higher valuation for its property arm Keppel Land (KLAN.SI).

At 9:19 a.m., Keppel Corp shares were up 0.94% at $12.82 on a volume of 1.1 million shares.