Sembcorp Marine - OCBC Investment 2017-09-19: Signs LOI For At Least Two CGL Carriers

Sembcorp Marine - OCBC Investment 2017-09-19: Signs LOI For At Least Two CGL Carriers SEMBCORP MARINE LTD S51.SI

Sembcorp Marine - Signs LOI For At Least Two CGL Carriers

  • Sembcorp Marine’s subsidiary, Specialised Shipbuilding Pte Ltd, and SeaOne Caribbean LLC have inked a letter of intent for the design and construction of at least two large Compressed Gas Liquid (CGL) carriers which will be deployed for SeaOne’s Caribbean Fuels Supply Project. 
  • The 366m long, 2 Bcf capacity carriers will have a design that incorporates proprietary ship component ideas from SMM’s subsidiary, LMG Marin. Front-end engineering design studies are in progress. 
  • As prices are also being negotiated, no contract values have been disclosed. However, we think they should cost more than the tug barges that SeaOne in Jun signed with Samsung via a letter of intent, as
    1. SMM’s units are carriers, not barges,
    2. SMM’s units are more sophisticated than a typical carrier. 
  • Recall that Samsung is slated to build 12 articulated tug barges that will be the first to carry CGL with a total contract value of more than US$1.5b, translating to at least S$170m each. 
  • Maintain BUY with S$1.98 Fair Value Estimate on Sembcorp Marine.




Low Pei Han CFA OCBC Investment | http://www.ocbcresearch.com/ 2017-09-19
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 1.980 Same 1.980



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