Company Name: SEMBCORP INDUSTRIES LTD
| Research House: Daiwa | Price Call: HOLD | Target Price: 3.81 |
Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED
| Research House: Daiwa | Price Call: BUY | Target Price: 10.24 |
Daiwa Capital Markets has downgraded oil-rig builder Sembcorp Marine (SCMN.SI) to hold from outperform and cut its target price to $3.81 from $6.05.
The brokerage also lowered its target price for Keppel Corp (KPLM.SI) to $10.24 from $13.69 and kept its outperform rating.
Daiwa said the rig building sector is likely to derate due to the increased likelihood of a recession, but Sembcorp Marine's outlook is less positive than Keppel's as the former faces greater earnings risk due to its lower order book.
Keppel has an order book of $9.1 billion compared with $5.6 billion for Sembcorp Marine, but Daiwa has lowered its 2012-2013 earnings per share estimates for Keppel by 1-6% to reflect lower forecasts for property income and order wins.
At 10:40 a.m., shares of Keppel were 1.6% lower at $8.60, and have fallen 16.4% since the start of the year.
Sembcorp Marine shares were 1.5% lower at $3.89, and have lost about 28% since the beginning of the year.
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