DBS Vickers Research on 28 May 2013
SEMBCORP Marine (SMM)'s subsidiary, Jurong Shipyard, has secured a US$596 million contract for a newbuild ultra-high specification jack-up rig for deployment in the United Kingdom sector of the North Sea from Noble Corp. It comes with an option for an additional unit.The latest order brings SMM's YTD wins to S$2.43 billion, forming 49 per cent of our full-year expectation of S$5 billion.
Hence, we are leaving our forecasts intact. While this sizeable contract win is encouraging, we would like to see a faster ramp-up of new orders that will boost earnings visibility in 2014, strong pick up in repair sales in H2 2013, and continued improvement in margins before revisiting our "hold" recommendation and TP of S$4.70.
HOLD
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