Stock Name: SembMar
Company Name: SEMBCORP MARINE LTD
Sembcorp Marine: S$4.91 BUY (TP: S$5.70)
Finalised US$4b contracts for five drillships
Value of contracts within expectations. Sembcorp Marine (SMM) announced
that they have secured contracts for five drillships valued at US$4.032b (S
$5b) from Sete Brasil. The contracts were widely anticipated by the market.
The implied value of US$806m per rig is 2% higher than the value of the
first drillship contract secured in Feb 2012 and is within our expectation.
We keep our FY12-14F net profit estimates unchanged as we have factored in
the drillship contracts. Maintain BUY on the stock with a TP of S$5.70.
With a record order book level, we believe SMM can afford to be more
selective with new projects.
Net order book at record level of S$11.5b. With the new contracts, we
estimate that SMM has secured S$8b orders YTD. Net order book is estimated
at S$11.5b, a new record for SMM. The previous record was close to S$10b in
2008. The six drillships for Sete Brasil (including the one secured in Feb)
will be built based on the Jurong Espadon design and scheduled for delivery
between 2Q2015 and 2Q2019.
Company Name: SEMBCORP MARINE LTD
| Research House: DMG | Price Call: BUY | Target Price: 5.70 |
Sembcorp Marine: S$4.91 BUY (TP: S$5.70)
Finalised US$4b contracts for five drillships
Value of contracts within expectations. Sembcorp Marine (SMM) announced
that they have secured contracts for five drillships valued at US$4.032b (S
$5b) from Sete Brasil. The contracts were widely anticipated by the market.
The implied value of US$806m per rig is 2% higher than the value of the
first drillship contract secured in Feb 2012 and is within our expectation.
We keep our FY12-14F net profit estimates unchanged as we have factored in
the drillship contracts. Maintain BUY on the stock with a TP of S$5.70.
With a record order book level, we believe SMM can afford to be more
selective with new projects.
Net order book at record level of S$11.5b. With the new contracts, we
estimate that SMM has secured S$8b orders YTD. Net order book is estimated
at S$11.5b, a new record for SMM. The previous record was close to S$10b in
2008. The six drillships for Sete Brasil (including the one secured in Feb)
will be built based on the Jurong Espadon design and scheduled for delivery
between 2Q2015 and 2Q2019.
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