CIMB ups Keppel Corp to $14.00, keeps outperform

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

CIMB Research has raised its target price on Keppel Corp (KPLM.SI), the world’s biggest builder of oil rigs, to $14.00 from $13.50 and maintained its outperform rating.

Keppel Corp said on Wednesday it has secured contracts to build two high-specification jack-up rigs from Qatar’s Gulf Drilling International worth $393 million, lifting its year-to-date orders to $5.5 billion and order book to $8 billion.

In view of Keppel Corp’s order momentum, CIMB has upgraded its 2011 order target to $8.5 billion from $7.5 billion, on faster-than-expected new orders.

“Payment terms for recent contracts have improved from 20:80 bullet payments to multiple milestones across construction periods, a vote of confidence in the financing conditions of the industry,” the brokerage said in a statement.

Order momentum should continue to provide strong support for the share price, it added.

At 2:30 a.m., Keppel Corp shares were down 1.4% to US$11.44 ($14.14) on a volume of 1.6 million shares. The stock has risen 11 percent so far this year.