Post Reply
2061-2080 of 3003
Credit Suisse recommends BUY with Target Price of $6.30
● SMM reported FY10 results with operating profits of S$943 mn,
14% ahead of our forecast of S$824 mn. Strong operating profit
margins of 30% in 4Q10 was driven by recognition of profit from
the CJ-70 rig, as well as execution of repeat rig orders .
● The company announced a special dividend of S˘25.0 above a
final dividend of S˘6.0, bringing total payout in FY10 to S˘36.0, or
87% of earnings.
● Management was bullish on the O& M space, noting that demand
in the deepwater segment may pick up when drilling activities in
GoM resume fully. The company also continues to see strong
enquiries in the high-spec jack-up market. Management remains
upbeat on potentially winning an order from Petrobras.
● We maintain our OUTPERFORM rating and increase our TP to
S$6.30 to reflect higher forecasts for the Cosco Shipyard Group.
Our SOTP value of S$6.30 is based on: 1) 20x O& M 2011E EPS,
2) an option value of S$0.19 from the potential Petrobras order, 3)
SMM’s stake in Cosco Shipyard and 4) SMM’s equity stake in
COSCO Corp.
Good Luck
• Sembcorp Marine - Up FY11 order wins assumption to S$5bn. Maintain BUY, TP raised to S$6.63. Sembcorp Marine reports record FY10 core net profit of
S$808m, beats our above consensus numbers by 6%. A final plus special DPS of 31.0 Scts was proposed.
Our analyst has raised FY11 order wins assumption to S$5bn (prev S$4.5bn) on the expectation for order wins to play catch up. FY11/12F earnings have been raised by 9% each on
1) higher order wins assumption
2) higher EBIT margins assumptions
3) higher associate’s contribution from Cosco Shipyard Group.
Maintain BUY, TP raised to S$6.63 (Prev S$ 6.0)
//dbs vickers//
SembMarine: FY10 results. Another record year of net profit at $860m, +23% yoy, soundly beating expectations. This was despite a 20% yoy decline in turnover to $4.56b, due to lower progressive revenue recognition for offshore projects.
Similar to Keppel, SMM reported strong operating margins, with 4Q10 OPM at 30.3% vs 25.4% qoq and 28.8% yoy.
Backed by a cash hoard of $2.9b, SMM is proposing 6cts final div and 25cts special div. Together with the 5cts interim div, full yr payout amounts to 36cts (+140% yoy), translating to a generous 6.9% yield.
Feb ‘11 orderbook stands at a healthy $4.8b, up from $4.7b at end 3Q10, with visibility till 2013. Furthermore, SMM has granted options for 10 additional rigs worth a combined $2.5b if fully exercised, suggesting strong order momentum may continue.
Mgt guides for 2011operating margins to stay at double-digit % pts, expects demand to further improve as order enquiries are rising. Notes fundamentals remain intact so long as oil prices stay > US$80, but acknowledges Middle East tensions could lead to some uncertainty in the near term.
The majority of Street reiterates Buy ratings, with a number of houses raising target prices.
Deutsche $6.90 to $7.
Credit Suisse $6.10 to $6.30.
Goldman $5 to $5.40 (neutral)
SembCorp Marine (S51.SG) is +1.9% at $5.31 after the rig builder’s 4Q results came in above expectations and the board recommends a special dividend of $0.21, plus $0.06 final dividend.
Net profit came in 19.5% lower on year, off 19.1% on quarter at $239.4 million due to lower revenue, which fell 26.8% on year, 11.8% on quarter to $982.9 million declines were due to fewer projects advanced to completion where revenue would accrue.
Goldman Sachs says net profit was 49% above its expectations, due to higher-than-expected operating margins (30% vs 18% for 9M10). It notes the total FY10 payout of $0.36 (including the interim dividend), implies a yield of 6% on Wednesday’s close.
The house raises its 2011 new orders forecast by 12% to account for a fuller potential pipeline, and raises 2011-2012E EPS estimate by 8% on better margins, thus lifts its target to $5.40 from $5.00. Still, it keeps a Neutral rating as “SMM’s valuations are less compelling than Keppel (BN4.SG),” with SMM’s P/E and P/B trading close to peak-cycle levels.
/theedge/
Sembcorp Marine, the world’s second-biggest oil-rig maker, reported the first drop in quarterly profit in three years as sales dropped after drillers ordered fewer rigs during the global recession.
Fourth-quarter net income dropped 20% to $239.4 million, or 11.52 cents a share, from $297.2 million, or 14.37 cents, a year earlier, Singapore-based Sembcorp Marine said in a statement today. That compared with an $171 million average of four analyst estimates compiled by Bloomberg. Sales fell 27% to $982.9 million.
Sembcorp Marine’s sales fell after a 78% plunge in new orders in 2009 as drillers pared purchases of rigs amid the financial crisis.
Rebounding economic growth and rising crude prices may cause oil companies to boost spending on exploration and production 11% this year to US$490 billion ($625.4 billion), according to a Dec. 15 note from Barclays Plc.
“Exploration and production spending budgets continue to show positive development with oil companies reporting intention to increase spending further in 2011,” Sembcorp said in the statement. The company won $2 billion worth of orders for jack-up rigs since the fourth quarter, it said.
Its operating profit margin improved to 30% in the fourth quarter, from 29% a year earlier, the company said. Operating profit, or sales minus the cost of goods sold and administrative expenses, dropped 23% to $297.8 million.
The rig-maker was unchanged at $5.21 at the 5 p.m. close of trading in Singapore before the announcement. The company has jumped 42%, while larger rival Keppel Corp. has climbed 38% in the past year, outperforming the benchmark Straits Times Index’s 7.9% gain.
Sembcorp Marine won $3.04 billion worth of orders in 2010 and has received contracts valued at $361 million this year, helping boost its order backlog to $4.8 billion.
/theedge/
SINGAPORE : Rig builder Sembcorp Marine on Wednesday said its fourth-quarter net profit fell 20 per cent on-year to S$239 million.
This compares with S$297 million a year ago.
Analysts said the result was better than expected, even though there were fewer rigs to build.
Sembcorp Marine's full-year net profit expanded 23 per cent to S$860 million.
This comes despite a 20 per cent drop in full year revenue to S$4.6 billion due to lower revenue recognition from its projects.
Meanwhile, its revenue in the fourth quarter fell 27 per cent to S$983 million.
But analysts are not worried, citing the healthy profit margins that Sembcorp has consistently shown.
Kay Lim, analyst for Equity Research (Offshore) at DnB NOR Markets, said: " Even though the profits were down compared to the Q4 2009, but we have seen Q4 2010, they have beat analysts' forecast and also the consensus estimate.
" The gross profit margins came in at 30 per cent...margins have been very encouraging given that they are building on very high series of orders that has allowed them to gain economies of scale on their repeat orders."
Observers expect profit margin to stay above 15 per cent at least for this year.
Going forward, the world's second largest rig-builder said it will continue to drive productivity.
It hopes to do that with its move to the new Tuas yard, which can provide more automation of equipments and machineries.
Phase one of the yard is scheduled for completion at the end of 2013, with partial operations commencing in the second half of 2012.
Analysts added that this will reduce its reliance on foreign workers, for whom levies are being raised.
Tan Cheng Tat, chief financial officer at Sembcorp Marine, said: " Given the government's initiative to promote productivity as well as setting aside budgets for innovation and productivity enhancement, I think we will definitely drive ourselves even harder to come up with products as well as process innovation to benefit from the grants and incentives that are being put up by the government."
Sembcorp Marine has declared a final dividend at 31 cents per share, including a special dividend of 25 cents per share.
Last year's special dividend was 4 cents per share.
- CNA/ms
SembMarine: Citi maintains Buy with $6.20 TP, staying above consensus. Note that SembMar has underperformed Kepcorp YTD on the back of slower orderbook momentum, as well as concerns over its premium valuations.
However, believe that consensus is too cautious on its fundamental outlook currently trades close to mid-cycle level valuations and could rerate higher once orderbook momentum returns. A strong re-rating to valuations will occur when SMM penetrates the drillship market and narrows the product gap with the larger Korean yards.
Daiwa note that 4Q10 results on 23 Feb and look forward to seeing what
the 'normal' operating margin is. Forecast SembMar to announce a Net Profit of $136.6m and $1.1b of revenue. Maintain OutPerform with $5.60 TP, while key share price catalyst will be the announcement of contract awards.
Expect some additional awards for high-specification jack-ups in 2011, but not at the pace they have been between Sept10 and now. Do not expect any sizable volume of semi-submersible orders until late 2011.
Sembmar, 50-50 chances. technical oversold. all the bottom prices were shown in the chart below. Seems the 1 dollar gap down during mutiple years high due to forex losses was hard to cover. just got to hear next week 23 feb 2011 $$$ report liao.
magic number : $5.13, $5.03, $4.96, $4.86 (do keep a watch)
ic1990 ( Date: 10-Feb-2011 21:25) Posted:
| chart very ugly. bearish divergence between MACD and prices, more downside to come
|
|
chart very ugly. bearish divergence between MACD and prices, more downside to come
CIMB 10 Feb 11
Sembcorp Marine (SMM SP S$5.34) – SELL
FY12 P/E: 17.9x, P/BV: 3.7x
• Sembcorp Marine tested its long term uptrend channel resistance twice in the
past couple of months. Prices appear to have formed an ending wedge
pattern.
• If prices close below the S$5.33 wedge support, this breakdown would
increase the odds that a top is in place at S$5.56. Anything below the low of
S$5.23 would confirm that prices are heading much lower to correct the rally
from late September. Its MACD and RSI continue to sport negative
divergences.
• Traders may opt to sell now with a stop place above S$5.48 or wait for the
breakdown of S$5.23 before jumping in. Prices should fall back towards
S$4.75 if the S$5.23 lows is breached.
$5.oo is very good bet. FY2010 results coming 23 Feb (wed nite) - can expect good div + Bonus issue.
Stock Code: SCMN.SI
Company: Sembcorp Marine
Slug: Customers anticipate higher prices
Date of Report: 09/02/2011
Producer: MJ Brohier
OCBC Investment Research is maintaining its BUY call on SembCorp Marine, because it has been getting a lot of orders at higher prices and on better payment terms since October 2010.
And prices and margins might keep rising if SembCorp Marine runs out of capacity to build oil rigs, says analyst Low Pei Han.
OCBC also quotes SembCorp’s US customers Atwood Oceanics, Noble Corporation and Diamond Offshore, which expressed optimism about the outlook and hinted that the prices they are paying for oil rigs at in part fixed, while others will fluctuate with steel prices.
This means that SembCorp has locked in an undisclosed proportion of their prices, while ensuring that rising costs are passed on to customers.
~INVESTOR CENTRAL’S TAKE~
Sembcorp Marine’s current ratios (by Reuters):
P/E: 15.58x
P/B: 4.86x
Free cashflow: -
Low has a price target of S$6.17, while analysts surveyed by Reuters have on average an OUTPERFORM call on the stock with a price target of S$5.60, compared to its last traded price of S$5.44.
As always, please see your licensed financial advisor before making any investment decisions.
Conflicting recommendations...wonder what exactly should we do? Haha.
Sembcorp Marine: Promising newbuild prices
By Low Pei Han
Tue, 8 Feb 2011, 09:30:31 SGT
Prices of recent jack-up orders (Pacific Class 400 design) secured by Sembcorp Marine (SMM) are on average 12% lower than orders clinched in the peak years of 2007-08, which is better than our expectations. Going forward, should new orders continue to flow, the number of available rig slots at prominent shipyards will decrease, and yards such as SMM may enjoy greater pricing power as the tide turns in their favour. We also gleaned insights from recent analyst briefings of three US drillers and found increasing optimism about the general outlook for the rig market in various parts of the world, though activity in the Gulf of Mexico is expected to remain low. For SMM, we keep our FY10 earnings estimates intact but increase our FY11F net profit forecast after incorporating higher margin assumptions. Meanwhile, we have also updated the market value of SMM’s stake in Cosco. As such, our SOTP-based fair value estimate rises from S$5.70 to S$6.17. Maintain BUY.
Margins likely to remain healthy. Looking at recent prices of jack-up orders secured by Sembcorp Marine (SMM) since Oct 2010, we estimate that the average price of US$185m/rig for its popular Pacific Class 400 design (based on Oct 2010- Jan 2011 data) is about 12% lower than the average price of US$210m/rig for its earlier Pacific Class 375 design (based on Jun 2007- Sep 2008 data). Previously we had conservatively incorporated a 20% haircut compared to peak orders in 2007-2008 in our pricing assumptions. Should new orders continue to flow, the number of available rig slots at prominent shipyards will decrease, and yards such as SMM may enjoy greater pricing power as the tide turns in their favour. Meanwhile, the group has also seen a substantial increase in operating margins from 9.9% in FY08 to 18.5% in 9MFY10, partly due to higher productivity. With the higher-than-expected newbuild prices, we now assume operating margins of 14-16% for FY11-12, at the same time noting that margins from Petrobras may be lower should SMM clinch orders in the 28-rig tender.
Comments from US drillers. We also gleaned insights from recent analyst briefings of three US drillers – Atwood Oceanics, Noble Corporation and Diamond Offshore the rest will report their earnings in mid to late Feb. Atwood mentioned that regarding the price of options for its newbuilds, there are “fixed price elements”… ‘with some indexation”, possibly meaning there may be cost escalation clauses if prices such as steel rise considerably in the future. The three companies also expressed optimism about the general outlook for the rig market in various parts of the world (e.g. Brazil, North Sea, West Africa), though activity in the Gulf of Mexico is expected to remain low despite the absence of an official moratorium. Other salient points include tighter shipyard capacity (especially for deliveries in 2013 and 2014) as well as operator preference for newer units (even though the capabilities of older units may match the drilling program).
Maintain BUY. We are encouraged by recent orders placed by established rig owners, and expect more to come, possibly at higher prices and better payment terms for the shipyards. For SMM, we keep our FY10 earnings estimates intact but increase our FY11F net profit forecast by 9.3% after incorporating higher margin assumptions. Meanwhile, we have also updated the market value of SMM’s stake in Cosco. As such, our SOTP-based fair value estimate rises from S$5.70 to S$6.17. Maintain BUY.
|
|
CLSA cuts Sembcorp Marine to Sell from Outperform
CLSA downgrades Sembcorp Marine (S51.SG) to Sell from Outperform as it expects the company’s profits to fall 26% in 2011 to $611 million, before growing 3% in 2012, because of tighter margins.
But it says it expects Sembcorp Marine to gain $7.6 billion in new offshore and marine orders for 2011.
“Thinner margins are likely after a drop in new-build prices and intense competition for Petrobras orders,” says CLSA, adding that the stock is fully valued at 18.3X PE in 2011 vs its peers.
The house cuts the company’s target price by 5% to $5.00. Sembcorp Marine is down 0.4% at $5.39.
SINGAPORE, Feb 8 (Reuters) - OCBC Investment Research has raised its target price for Sembcorp Marine , the world's second largest oil rig builder, to S$6.17 from S$5.70 and kept its buy rating.
STATEMENT: OCBC said it has increased its net profit forecast by 9.3 percent for Sembcorp Marine's 2011 financial year after incorporating higher margin assumptions. The brokerage said the prices of recent jack-up orders secured by Sembcorp Marine are on average 12 percent lower than those clinched in the peak years of 2007-2008, which is better than OCBC's expectations.
It added that if new orders continue to flow, the number of available rig slots at prominent yards will decrease and Sembcorp Marine may enjoy greater pricing power. Based on recent analyst briefings of three U.S. drillers, OCBC also noted increasing optimism about the general outlook for the rig market in various parts of the world, though activities in the Gulf of Mexico are expected to remain low due to few new licenses for oil drilling.
At 0121 GMT, Sembcorp Marine shares were down 0.6 percent at S$5.38 on a volume of 480,000 shares.
(Reporting by Eveline Danubrata) ((eveline.danubrata@thomsonreuters.com +65 6403 5669 Reuters Messaging: eveline.danubrata.reuters.com@reuters.net))
Milestone Groundbreaking of Sembcorp Marine's Integrated New Yard Facility
Tuesday, June 22nd, 2010
SPEECH BY MR GOH GEOK LING, CHAIRMAN OF SEMBCORP MARINE, AT THE GROUND-BREAKING CEREMONY OF SEMBCORP MARINE’S INTEGRATED NEW YARD FACILITY ON 21 JUNE 2010 AT TUAS VIEW EXTENSION
Good evening and a very warm welcome to all our guests to the ground-breaking
ceremony of our Phase I Integrated New Yard Facility here at Tuas View Extension.
We are privileged to have with us today our Guest-of-Honour Mr Lim Hng Kiang,
Minister for Trade and Industry, Mr Gao Hongfeng, Vice Minister of Transport, People’s
Republic of China, Mr Wei Wei, China’s Ambassador to Singapore, senior officials from
EDB, JTC, MTI and our valued customers and partners who have taken time off their
busy schedule to join us on this auspicious occasion.
Ground-breaking is an important tradition practiced by many cultures worldwide to
celebrate the official construction commencement of a building project. Like the strike
steel ceremony for a newbuild rig, ground-breaking is a significant milestone as it marks
the vital first step of physically transforming a blueprint into reality.
The ground-breaking of our New Yard marks a defining moment in our history and a significant leap forward as we forge ahead into our next phase of growth. With its innovative work-efficient design, the state-of-the-art yard development will further bolster our home-base capabilities to deliver value-added cost-competitive solutions to our customer partners. The New Yard will be an invaluable asset which will be a key catalyst in sharpening Sembcorp Marine’s competitive edge for long-term sustainable growth.
We have come a long way since April 1963 when Sembcorp Marine, formerly known as Jurong Shipyard Limited, was first incorporated as a joint venture shipyard by the Singapore Government and Ishikawajima-Harima Heavy Industries Co. Ltd of Japan (IHI). The late Dr Goh Keng Swee, who was then the Finance Minister, together with
the government through EDB were instrumental in the setting up of Jurong Shipyard
Limited, one of earliest tenants in the Jurong Industrial Estate.
Our Group’s growth and progress closely parallels the Singapore story. From a humble
set-up, Sembcorp Marine has grown from a single shipyard entity into a network of
seven shipyards - with five shipyards spreading across different parts of Singapore and
two in Indonesia. We have also strategic presence in USA, India and Brazil.
During our early years, initial leadership was provided by the Japanese under IHI. With
localization, Mr K K Tan took over the helm and with the support of his dedicated
management team, revenue grew from S$0.5 million in 1965 to S$5.7 billion in 2009.
Our shipyards also built on their competencies by moving up the value-chain to offer
customers a complete suite of services from ship repair, shipbuilding, ship conversion
and rig building to turnkey engineering & construction of offshore production platforms.
47 years on, we are gathered here to witness another significant milestone - the groundbreaking
of Singapore’s first purpose-built and custom-designed new yard that we
announced in November 2009.
The idea of the New Yard was first mooted by K.K. Tan and his team more than 10
years ago. It was largely driven by our strategy to differentiate ourselves from
competition and to stay relevant to the needs of our customers. I would like to thank
Mr K.K. Tan and his team for their tenacity in overcoming the many obstacles to bring
about the ground-breaking of this new yard today.
We have harnessed our 47 years of experience and expertise into the design and layout
for this new yard, taking into consideration the challenging operating environment and
competitive landscape. The new yard is designed to maximize operational synergy and
production efficiency, incorporating an efficient work flow framework that ensures
minimum logistical movements and productive use of manpower. Ultimately we want to
provide customers with work-efficient solutions, enhanced services, faster turnaround
and minimal downtime.
Our new yard is also strategically positioned along the major sea lanes of Singapore – making it an ideal and convenient hub of choice for vessels trading in the region.
The 206-hectare new yard will be built in three phases. Under Phase I of the new yard
development, 73.3 hectares will be developed for ship repair and ship conversion
operations. Phase I of the yard is scheduled for completion end 2013 with partial
operations commencing in the second half of 2012. It will feature 4 VLCC drydocks
with a total dock capacity of 1.55 million deadweight tonnes. The width of the docks
ranges from 66 metres to a maximum of 89 metres and length from 350 metres to 410
metres. The water depth from 8.5 metres to 11 metres and total quay length of 3,408
metres. The yard will be equipped with state-of-the-art fitting shops, central hull
workshop, warehouses, craneage facilities and incorporating innovative green
technologies. There will also be a Health, Safety & Environment (HSE) Centre with
medical clinic facilities, a training centre, and offices for our customers and a dormitory
for our staff and workforce.
Our vision of this New Yard would not have materialized if not for the unwavering
confidence and steadfast support accorded by the government agencies like EDB, JTC
and MTI. We are very grateful for the strong backing by Temasek Holdings and our
parent company Sembcorp Industries. We would also like to thank Minister Lim Hng
Kiang and the MTI team for believing in this project.
To all our valued customers who are here with us this evening, we thank you for your
trust and confidence all these years. With our New Yard, we will definitely continue to
serve you better and we look forward to your continued support and partnership in the
future.
Special mention must also be given to our project partner Zhen Hua Engineering Pte
Ltd, a subsidiary of China Harbour Engineering Company Ltd (CHEC), one of the
largest state-owned enterprises in China. Today, we are pleased to have the presence
Mr Gao Hongfeng, China’s Vice Minister of Transport, Mr Wei Wei, China’s
Ambassador to Singapore and senior representatives from CHEC to share with us their
commitment and insights into the project.
Going forward as we embark on our next phase of growth, I am confident that Mr W. S.
Wong, the President and CEO of Sembcorp Marine and his team will lead this New
Yard project to fruition and continue to steer Sembcorp Marine and the marine and
offshore industry to new frontiers of excellence.
Thank you
SPEECH BY MR LIM HNG KHIANG, MINISTER FOR TRADE AND INDUSTRY, AT THE GROUNDBREAKING CEREMONY OF SEMBCORP MARINE NEW YARD ON MONDAY 21 JUNE 2010 AT TUAS EXTENSION
Introduction
I am pleased to join you today to witness the groundbreaking ceremony of Sembcorp Marine’s New Yard.
Bright Outlook for the Marine and Offshore Industry
The marine and offshore industry has undergone significant transformation since the 1960s when plans were first made to grow a marine industry in Singapore. Today, the industry embraces a wide range of capabilities such as rig-building, ship repair and conversion and specialised vessel construction. It is one of the fastest growing sectors in our economy. In the past five years, the industry has grown by a compounded growth rate of 18 per cent. Last year, despite the global downturn, manufacturing output was close to S$20 billion. This represents about 10 per cent of our total manufacturing output.
Indeed, the long term prospects for marine and offshore industry remain bright. Singapore continues to be a leading ship repair centre and the top offshore rig builder in the world. We account for as much as 70 per cent of the world’s output of jack-up and semi-submersible rigs, as well as Floating, Production, Storage and Offloading (or FPSO) vessel conversion.
To retain our global share, the sector continues to seek out new markets. Some of our major shipyards have ventured into Brazil, for deepwater offshore projects. Others have secured contracts in South and Southeast Asia. We are also further consolidating our position as an integrated marine and offshore hub. We currently have world class shipyards and companies offering complex oil and gas systems and components, and offshore-related services. Our companies are now expanding and undertaking an even wider range of activities, such as manufacturing, headquarter services, training, research and development, engineering, regional distribution, and more.
Sembcorp Marine’s New Yard will be an important contribution to our integrated marine hub. Much of the marine and offshore industry is clustered around the activities of shipyards, attracting high value system and component repair and aftermarket services. SembCorp Marine contributes nearly 30 per cent of the industry’s manufacturing output in Singapore, and their investment in building capacity will have a strong spin-off effect for the entire industry cluster.
Boosting Productivity for Long Term Sustainable Competitiveness
To stay ahead in the global marine and offshore arena, Singapore’s marine and offshore industry also needs to continually improve its competitive edge. I am therefore pleased to note that many companies in the sector have made the goal of improving their innovation and productivity levels a top priority.
For instance, Sembcorp has maximised their operational effectiveness by improving process flow and facility layout, offering higher value products and services, and increasing supply chain efficiency and resource productivity. Sembcorp Marine’s New Yard reflects their commitment towards raising productivity levels. The yard will have the latest production technology and processes so as to achieve
faster turnaround time and is designed so that it optimises land use. It will enable SembCorp Marine to further boost its competitive advantage.
I look forward to seeing more companies follow Sembcorp Marine’s lead in this regard. The government has recently set aside S$2 billion for a National Productivity Fund to encourage greater productivity growth across 12 priority sectors, including the marine and offshore sector. I encourage companies in the marine and offshore sector to come forward and tap on these funds. Boosting productivity levels will be a key factor in ensuring that our marine and offshore industry continues to grow and achieve long term sustainable competitiveness.
Strengthening R& D Capabilities
R& D is yet another key driver for the industry’s further growth. In the fast growing global marine and offshore industry, improving and upgrading is essential in order to stay ahead of the competition. A number of the world’s largest oil and gas equipment companies and oil field services companies have already set up R& D operations in Singapore, or are in the process of doing so. The government through agencies such as EDB and A*STAR, is also committed towards helping our companies grow their R& D capabilities. For example, in April this year, the Singapore Institute of Manufacturing and Technology, a research institute of A*STAR, and Astoria Consulting Pte Ltd, jointly developed an algorithm technology that promises productivity boosts for shipyards by allowing better optimisation of planning and deployment of critical resources. I encourage all sectors of the marine and offshore industry, be it, classification societies, offshore engineering companies, and equipment manufacturers to invest in and strengthen their R& D capabilities so as to keep their competitive edge sharp.
Conclusion
In closing, I would like to extend my heartiest congratulations to the management and staff of Sembcorp Marine on your groundbreaking ceremony for your New Yard. This marks a new milestone, not just for Sembcorp Marine, but also for the Singapore marine and offshore industry. I wish you every success. Thank you.
CIMB 2 Feb 11
Sembcorp Marine (SMM SP S$5.34) – SELL
FY11P/E: 18.2x, P/BV: 4.2x
• Sembcorp Marine is also fast approaching its long term uptrend channel
resistance. Prices have been delaying its fall, suggesting that an extended
pattern is in place, i.e. an ending wedge pattern.
• Closing below the S$5.30 wedge support would be a more than welcome sign
for the bears. Anything below the recent low of S$5.23 would confirm that
prices are heading much lower to correct the rally from late September. Its
MACD and RSI continue to sport negative divergences.
• We expect one more test of the old high of S$5.56 or thereabout before this
pattern terminates. Traders may opt to sell now with a stop place above
S$5.76, the level which would eliminate the wedge pattern or wait for the next
upswing to sell. Prices should fall back towards S$4.75 if the S$5.23 lows is
breached.
seem the time is ripe for me to cover back my lots at
$5.29 - $5. 25
happy trading
