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Sembcorp Marine: Secures S$130m contract from MODEC (BUY, S$3.07, TP S$5.46)-Flash
Jason Saw (6232 3871,
jason.saw@sg.oskgroup.com)
No slowdown in FPSO jobs
maintain BUY
. Jurong Shipyard, a wholly owned unit of
Sembcorp Marine (SMM), has won a contract to convert a very large crude carrier (VLCC) into a
FPSO for MODEC. The contract is valued at S$130m. The FPSO, to be named MV “Tar II”, is
expected to be ready by 2Q13. We see further order book opportunities in the FPSO segment:
International Maritime Associates (IMA) has identified 53 new projects to be awarded in the next
12 to 18 months and we expect SMM to benefit from this positive trend. We maintain FY11-13F
EPS estimates and TP at S$5.46. Maintain BUY.
Eight jackup options remaining could bid for Statoil semi-sub. We estimate that SMM has
an outstanding order book of S$5.8b with deliveries up to 2014. YTD order win of S$2.75b is
slightly below our full-year estimate of S$3.5b, but we think this is achievable. The company has
eight options for newbuild jackup rigs worth S$2b. Most of these options are in-the-money as rig
prices have increased by 5-10% since the start of 2011. Aside from the options, Upstream
reported on 30 Sep 2011 that Helix has teamed up with Jurong Shipyard to bid for Statoil’s
Category B semi-submersible drilling rig which could be worth more than US$500m.
Valuations. Share price has fallen ~43% since beginning Aug 2011 and is now valued at 10x
FY12F P/E and 2.5x FY11F P/B. Net cash of S$1.1b (excluding customer down payments) is
equivalent to 18% of its current market cap or S$0.54/share. We expect cash level to be
significantly boosted in 3Q11 following the completion of Songa Eclipse. During the global
financial crisis, SMM’s valuation reached a low of 1.83x P/B. On current estimates, this would
translate into S$2.22/share (based on FY11F BV).
Sembcorp Marine: Announced that it has secured $130m contract to convert a Very Large Crude Carrier (VLCC) tanker, to a FPSO vessel. The FPSO will be delivered to OSX Leasing in Brazil. Conversion project is not expected to have any material impact on NTA and EPS of grp for FY11.
We note that contract brings YTD order wins at $2.8b, with an approximate orderbook of $5.6b vs KepCorp’s $9.1b. Deutsche maintains Buy on counter with $6.20 TP. House believe that they believe grp is a well managed global leader in its fields and stock’s P/B movements during the last global crisis (vis-à-vis oil price changes) can be used as a guide for reentry.
At current oil price of US$75-80/bbl, SMM trades at about 2.3x P/B, respectively, during the last crisis vs current P/B of 1 2.1x suggesting that counter may be trading roughly in line with its last crisis levels.
Sembcorp Marine: CIMB has Technical Buy Call. Note that the downtrend from $6.03 appears complete or about to be completed as house see a five wave movement from the peak. Prices could push a tad lower towards the $3.00 mark but yesterdays’ bullish engulfing pattern could potentially be a reversal signal.
See bullish divergence signals on both its MACD and RSI. With its RSI also in oversold condition, reversal could be just around the corner. Aggressive traders could go long now with a stop placed below S$2.95 but would prefer to wait for a pullback towards $2.95-3.02 range before attempting to get in. Place a stop below $2.80. Expect a rebound back up towards $3.80 levels in the short term. There is potential for prices to rebound back up to $4.25-4.50 if the $3.80 level is breached.
S$2.64pharoah88 ( Date: 05-Oct-2011 09:20) Posted:
| SembCorp Marine (SMM SP S$3.07 Trading BUY) - Aggressive traders could go long now with a stop placed below S$2.95 but we would prefer to wait for a pullback towards S$2.95-3.02. |
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European stock markets All go up
British FTSE 100
5068.68 +124.24 +2.51% 15:02
British Financial Times Index
5345.73 +129.02 +2.47% 15:03
The German DAX 30 stock index
1295.81 +28.04 +2.21% 15:19
Russia's MICEX index
2931.60 +81.05 +2.84% 15:03
France CAC40 index
5529.34 +84.79 +1.56% 15:03
Switzerland Stock Index
14495.10 +251.13 +1.76% 15:03
FTSE Italy MIB Index
Madrid, Spain Composite Index
273.77 +3.53 +1.31% 15:13
Stockholm, Sweden index
5106.65 +86.11 +1.72% 15:12
Norway OSEAX index
379.96 +6.49 +1.74% 15:09
Ireland index
275.52 +5.46 +2.02% 15:03
Dutch AEX index
8403.90 +178.50 +2.17% 15:03
Spain's IBEX index
2141.44 +50.35 +2.41% 15:03
News: European shares sharply higher open on Wednesday, the UK FTSE 100 up 2.4%
Sina Finance YORK October 5 pm news, Beijing time 15:00, the British FTSE 100 index rose 2.4 percent to 5063.79 points German DAX 30 rose 2.4 percent to 5346.89 points France's CAC 40 rose 2.1%, News 2911.88 points. European stocks overall benchmark Stoxx 600 index rose 1.6 percent to 220.98 points.
Morgan Stanley executives: global crisis will not recur in 2008
Sina Finance YORK afternoon of October 5, according to foreign reports, Morgan Stanley Asia Chairman Stephen - Roach (Stephen Roach) said on Tuesday that Europe might have fallen into a mild recession in the United States may also fall into the same predicament, But the current global economic turmoil can not reach the severity of the crisis in 2008.
Roach in Toronto prediction meal at the CFA Institute, said, " I think the global economy suffered a major impact is unlikely."
He believes that the U.S. economy has just increased, mainly France and Germany and other euro zone economies will soon shrink, which entered into recession in other European countries in the world.
He said: " For me, the major developed countries are at the edge of recession, and possibly in the next 12 months into a recession."
He believes that the euro zone out of the woods road is clear that Europe needs a financial alliance. This will require a 17 euro-zone member states work together, transferring part of their sovereignty, and acknowledge that: there is no cohesive financial alliance, the monetary union will be doomed to fail and to collapse.
Ok, my 'internal guide' tells me to wait. Now crude oil start to retreat a bit, see Europe opening later. Cheers!
iPunter ( Date: 05-Oct-2011 12:02) Posted:
You should follow your own 'internal guide'...
susan66 ( Date: 05-Oct-2011 11:51) Posted:
| So you advise I should cover |
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You should follow your own 'internal guide'...
susan66 ( Date: 05-Oct-2011 11:51) Posted:
So you advise I should cover?
iPunter ( Date: 05-Oct-2011 11:30) Posted:
It's not good to wait till one is 'panicked by the market'...
That would mean one is being tossed around by the market...
One must have a firm assumption of the major trend...
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So you advise I should cover?
iPunter ( Date: 05-Oct-2011 11:30) Posted:
It's not good to wait till one is 'panicked by the market'...
That would mean one is being tossed around by the market...
One must have a firm assumption of the major trend...
susan66 ( Date: 05-Oct-2011 11:23) Posted:
I don't feel panic yet, still looks weak, will monitor closely. Normally this counter should gap up quite a lot if bulls come but I don't see it yet.  |
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It's not good to wait till one is 'panicked by the market'...
That would mean one is being tossed around by the market...
One must have a firm assumption of the major trend...
susan66 ( Date: 05-Oct-2011 11:23) Posted:
I don't feel panic yet, still looks weak, will monitor closely. Normally this counter should gap up quite a lot if bulls come but I don't see it yet.
Farmer ( Date: 05-Oct-2011 11:04) Posted:
Nobody is sure at this time whether a long position will still be in the money and for how long.
But, I would say an open short position not in the money can really be an endless nightmare if the market turns due to good news, this one can hit $3.30 again and beyond.
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I don't feel panic yet, still looks weak, will monitor closely. Normally this counter should gap up quite a lot if bulls come but I don't see it yet.
Farmer ( Date: 05-Oct-2011 11:04) Posted:
Nobody is sure at this time whether a long position will still be in the money and for how long.
But, I would say an open short position not in the money can really be an endless nightmare if the market turns due to good news, this one can hit $3.30 again and beyond.
iPunter ( Date: 04-Oct-2011 23:07) Posted:
At this time, having a short position is good play...
As long as one is in the money, one can sleep well.
But not so with an open long position...
which can be an endless nightmare...
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Sifu is right...
Like today... the STI "
Chiong Aaaaaaaarrrhhh!!!" ...
Many longs will "
tarn tio" (but not '
huat')...
Not losing is also "
tarn tio" ... lol...
Nobody is sure at this time whether a long position will still be in the money and for how long.
But, I would say an open short position not in the money can really be an endless nightmare if the market turns due to good news, this one can hit $3.30 again and beyond.
iPunter ( Date: 04-Oct-2011 23:07) Posted:
At this time, having a short position is good play...
As long as one is in the money, one can sleep well.
But not so with an open long position...
which can be an endless nightmare...
susan66 ( Date: 04-Oct-2011 23:02) Posted:
| Nowadays so volatile, still not sure good play or not, should have come in earlier. But trend is clear, confirm it's down. |
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yes , looking to add long position at this level to keep for 6 months to 1 year period
unlikely it will go below $3. Very strong support at $3. Unless STI fall below 2500...... LOL
SembCorp Marine (SMM SP S$3.07 Trading BUY) - Aggressive traders could go long now with a stop placed below S$2.95 but we would prefer to wait for a pullback towards S$2.95-3.02.
At this time, having a short position is good play...
As long as one is in the money, one can sleep well.
But not so with an open long position...
which can be an endless nightmare...
susan66 ( Date: 04-Oct-2011 23:02) Posted:
Nowadays so volatile, still not sure good play or not, should have come in earlier. But trend is clear, confirm it's down.
iPunter ( Date: 04-Oct-2011 20:59) Posted:
This is what I call good play...  |
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