Sembcorp Marine - RHB Invest 2017-09-12: USD145m Addition To Its Orderbook

Sembcorp Marine - RHB Invest 2017-09-12: USD145m Addition To Its Orderbook SEMBCORP MARINE LTD S51.SI

Sembcorp Marine - USD145m Addition To Its Orderbook

  • Sembcorp Marine announced that it has secured hull carry over works related to the FPSO P-68 Tupi project at its Brazilian yard worth USD145m. 
  • We estimate its current orderbook to stand at c.SGD3.8bn. As the amount of the contract falls within our expectations of orderbook replenishment, we make no changes to our earnings at this juncture. 
  • Maintain NEUTRAL with a SGD1.65 Target Price (4% upside), based on a 1.3x P/BV, the average Sembcorp Marine P/BV before the crude oil price rally in early 2010.



Carry over works for the Floating Production Storage and Offloading (FPSO) P-68. 

  • Sembcorp Marine announced that its wholly owned Brazilian subsidiary, Estaleiro Jurong Aracruz, has secured hull carry over works worth USD145m from Tupi BV for the FPSO P-68 Tupi project. 
  • Recall that in July 2012, Tupi BV awarded Sembcorp Marine the contract for the modules construction and integration of FPSO P-68 along with FPSO P-71 worth USD674m.


Orderbook of SGD3.8bn. 

  • We estimate Sembcorp Marine’s current orderbook to stand at SGD3.8bn, with projects ranging across drilling and non-drilling solutions. 
  • YTD, the company has secured c.SGD265m worth of orderbook replenishment coming from the offshore platforms and floating solution segments. We estimate the company to be able to add another SGD250m to its orderbook in FY17.


Maintain NEUTRAL. 

  • As the amount of new orders fall within our expectations, we make no changes to our earnings forecast at this juncture. 
  • We expect orderbook replenishment to continue to be slow in FY17 and could start to pick up in FY18 if oil prices continue to stabilise. 
  • Our TP of SGD1.65 is based on a 1.3x P/BV, the average Sembcorp Marine P/BV before the crude oil price rally in early 2010.




Singapore Research RHB Invest | http://www.rhbinvest.com.sg/ 2017-09-12
RHB Invest SGX Stock Analyst Report NEUTRAL Maintain NEUTRAL 1.650 Same 1.650



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