Sembcorp Marine (SMM SP) - DBS Research 2018-03-06: Energean FPSO Contract In The Bag?

Sembcorp Marine (SMM SP) - DBS Vickers 2018-03-06: Energean FPSO Contract In The Bag? SEMBCORP MARINE LTD S51.SI

Sembcorp Marine (SMM SP) - Energean FPSO Contract In The Bag?

  • Energean awards FPSO contract to Technip.
  • Sembcorp Marine is reportedly the forerunner to partner with Technip for the construction of the vessel.
  • Win would boost orderbook and confidence.
  • Recent weakness a buying opportunity; Target Price unchanged at S$2.90.



What’s New 



What’s the impact? 

  • TechnipFMC is expected to release further information on the contract soon, which would include details on the partnering shipyard. Sembcorp Marine (SMM) was said to be in pole position to secure contract to build the vessel according to Upstream in Jan-2018. If the deal materialises, this will be SMM’s first major contract for this year and confidence booster on order win momentum.
  • TechnipFMC performed front-end engineering and design studies (FEED) on the deep-water gas project last year. Under the EPCIC contract, TechnipFMC is expected to take on the development risk, as well as overseeing the appointed shipyard’s work on the FPSO. The unit is set to be 227 metres long and 50 metres wide. Along with the two gas trains, there will be one oil train of 14,000 barrels per day and a water train of 4000 barrels per day.


Recommendation 

  • Recent Sembcorp Marine share price correction offers good buying opportunities.
  • Reiterate our BUY call on SMM; Target Price unchanged at S$2.90.




Pei Hwa HO DBS Vickers | http://www.dbsvickers.com/ 2018-03-06
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 2.900 Same 2.900



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