OSK on 9 Apr 2013
The pricing of Keppel's (BN4.SG) latest jackup rig contract for long-term customer Ensco is positive at US$225 million ($279 million), says OSK
It notes the price is around 15% higher than an August 2011 order for a similar design, while it estimates equipment prices may have only risen by 8%-9% over the same period. The latest contract brings Keppel's year-to-date orders to $1.88 billion, it estimates, accounting for 38% of the house's $5 billion order win estimate.
It notes the price is around 15% higher than an August 2011 order for a similar design, while it estimates equipment prices may have only risen by 8%-9% over the same period. The latest contract brings Keppel's year-to-date orders to $1.88 billion, it estimates, accounting for 38% of the house's $5 billion order win estimate.
OSK keeps its FY13-14 EPS estimates unchanged as the order is within its forecasts. It keeps Keppel at Neutral with $11.21 target, citing expectations EPS will fall 30% on-year on the absence of lumpy property earnings and normalising O&M margins; it views the stock's current 14.8x FY13 P/E valuation as fair.
"Re-rating will be capped by rising concerns over competition for offshore orders from shipyards in China and South Korea." The stock is up 1.2% at $11.29.
"Re-rating will be capped by rising concerns over competition for offshore orders from shipyards in China and South Korea." The stock is up 1.2% at $11.29.
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