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Sembmarine

opening 4.28?? jump of 14c?

what the hell! y jump so much

ozone2002      ( Date: 13-Jun-2013 10:22) Posted: semb mar keeps getting cheaper $4.14 eyeing for $4 to enter.. still has huge order book as backing... fundamentals still intact.. gd luck dyodd

 

 

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semb mar keeps getting cheaper $4.14

eyeing for $4 to enter..

still has huge order book as backing... fundamentals still intact..

gd luck dyodd

 

3 reasons why Sembcorp Marine trumps Keppel as a stock pick

Higher earnings growth is one.

Sembcorp Marine also has better revenue coverage and relative underperformance, which has made it a more attractive stock over Keppel, according to Maybank Kim Eng.

But the research firm said that both stocks continue to see potential as their copmanies are poised to benefit from the recent uptrend in the rig ordering cycle.

Here's more from Maybank:

Maintain sector Overweight, SMM as preferred rigbuilding play. We continue to like the rigbuilders as we see mispricing in the stocks. We have Buy ratings for the duo, but our preference is for SMM (Buy, TP SGD5.40) over Keppel (Buy, TP SGD12.50) for its (1) higher earnings growth profile, (2) better revenue coverage and (3) relative underperformance. We also think that SMM should perform better on the upcycle given its pure play exposure. Maintain Overweight on the Singapore O& M sector.

Rig ordering cycle is still on an uptrend. The surprise upside in jackup orders in the first half of the year would only serve to boost the impending cycle. Next in play would be the return of more semisub orders following heightened deepwater activities. Major drillers echoed a consistent positive outlook in their 1Q13 results commentaries. While oil price may see some near-term volatility, we believe that it would be sustained above the crucial USD80/bbl level which is economically viable for most offshore oil and gas projects.

We expect average rig prices to rise. Despite rising threats from Chinese and Korean yards, we hold the view that Singapore yards have unique niches to defend against these competitions while they move up the value chain. We expect Keppel and SMM to secure a combined SGD11b in new offshore orders in FY13F (SGD8b in FY12 excluding Petrobras related orders). More importantly, we argue that despite the impending competition, average rig prices would hold up and even rise in the next 3 years.

Expect margins to trend up. Operating margin recovery for both Keppel and SMM in 1Q13 supports our view that consensus are overly pessimistic in margin expectations. We point out that margin declines in preceding quarters was due to a mix of lower price contracts from the start of a new rig building cycle and have nothing to do with current competition. Better product mix, operating efficiency and incremental price increases could soften risks from execution of Brazil orders. The release of risk contingencies taken upfront at later stages could also add to margin upside. We expect margins to trend up (albeit at a moderate rate), not decline as expected by consensus. We believe that data points in subsequent quarters would validate our view, triggering upward revisions in margin forecasts.

Concerns on margins over-amplified. Share price performance for Singapore rigbuilders has been capped due to persistent worries over margin contraction. While we recognise the existence of such risk, we believe that the concern was overdone. We expect continual order ins, increasing rig prices and margin outperformance in 2013 to lead to moderation of such fears. We urge accumulation during current stock weaknesses, ahead of the play out of our positive expectations.  

 

Any thoughts for now?

 

Sembcorp Marine

 

The offshores continues to show strength yesterday. 

Kepcorp was the stronger performer yesterday. It managed to continue its rebound after its bullish reversal confirmation. Lower low formation has definitely been formed and Kepcorp will be heading higher to form a higher high formation. The immediate resistance level that Kepcorp will face will be 11.80 level. It will likely to test this resistance level in this few days.

Sembmar also managed to head higher yesterday but its bullish attempts seems to be countered by sellers. A second shooting star was formed at the 50ma line which shows that the resistance at 4.39 level is firm. If Sembmar closes lower than 4.39 level today, it will indicate a possible retracement action to come.

Sembcorp struggled yesterday and ended up on the negative zone. Its 20ma resistance at 4.98 level is still preventing Sembcorp from trading higher. There is a need of a stronger catalyst to help Sembcorp to break this resistance level or else it will still remain in the downtrend momentum.

Overall, the offshores will continue to show its bullish strength today while attempting to test their resistance levels again.

 

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NEW Contracts announcement  plus HIGHER  volume would be sweet .

 

The offshores were seen attempting to rebound yesterday and managed to gain a little yesterday.

Sembcorp attempted to break its 20ma resistance line at 4.98 level and failed to close above it. Its dividend gap resistance level between 5.02 – 5.11 levels might have prevented it from trading higher. Sembcorp will likely to attempt to trade higher again today.

Sembmar showed bullish strength but it faced resistance at 4.39 level. It managed to break this resistance level during the day but the resistance level stayed firmed. This could be probably due to the 50ma resistance line at 4.39 level that is reinforcing the resistance. Sembmar will continue to attempt to break this resistance level today.

Kepcorp managed to confirm its bullish reversal candle yesterday. This will indicate a rebound towards its immediate resistance level of 10.80.

Overall, the offshores does still have bullish strength to rally before it reaches its resistance levels.

 

could be affected by  SCI .. ...

krisluke      ( Date: 30-Apr-2013 09:30) Posted: R = $4.37 S = $4.28 ... ...

 

REVIEW :::: what have been said by local analysts  this far....

From OCBC:
Sembcorp Marine: Pick up a quality stock on the cheap
Sembcorp Marine (SMM) reported a 11.4% YoY rise in revenue to S$1.05b and a 5% increase in net profit to S$118.7m in 1Q13, both accounting for about 20% of our full year estimates and in line with our expectations. Operating margin increased from 10.8% in 4Q12 to 13.7% in 1Q13, and the significant uptick could be partly because revenue recognition of the Sete Brasil drillship in the last quarter was not very significant. Management reiterated that enquiries remain healthy across the various business segments. SMM’s share price has underperformed the STI by about 15% YTD although there has been no change in the company’s fundamentals. In our view, investors seeking to hold a quality company for the longer term would find value in SMM. Maintain BUY with S$5.64 fair value estimate. 


From UOB KH:
Sembcorp Marine- 1Q13: Mixed signals.
(SMM SP/HOLD/S$4.26/Target: S$4.60)
FY13F PE(x): 17.1
FY14F PE(x): 14.5
Below consensus expectation. Sembcorp Marine (SMM) reported a net profit of S$119m (+5% yoy) on the back of a turnover of
S$1,050m (+11% yoy). 1Q13 net profit appears to be below consensus expectation, but within our expectation. 1Q13 net profit
accounts for 20% of consensus’ 2013 forecast of S$604m, but 23% of our 2013 forecast of S$516m.
Our 2013-15 earnings forecasts are largely unchanged. We maintain our contract win assumptions of S$5b p.a. for 2013-15 (2012: S$11b). Ytd, SMM has won S$1.7b worth of new contracts. Orderbook stands at S$13.6b with project deliveries stretching
to 2019. The seven drillships for Sete Brasil make up 49% of SMM’s orderbook.
Maintain HOLD. We lower our target price marginally from S$4.85 to S$4.60 due to valuations for SMM’s own shipyard business
(15x 2014F earnings vs 16x previously) and CSG following a cut in the latter’s earnings. We have widened SMM’s shipyard valuation vs Keppel’s (we have ascribed an 18x 2014F PE valuation to Keppel). Keppel’s O& M margins appear to be more resilient.
We suggest entry at S$4.10. 


From DBS:
SembCorp Marine’s 1Q13 results below expectations, net
profit up only 5% on slower than expected revenue
recognition. Our analyst has cut FY13/14 net earnings by
8%/4%, factoring in slower revenue recognition. Healthy rig
demand but keen competition could cap margins recovery.
Maintain HOLD with a lower TP of S$4.70 (Prev S$ 5.00).

 

Sembcorp Marine: Pick up a quality stock on the cheap

By Low Pei Han Mon, 6 May 2013, 09:19:14 SGT Sembcorp Marine (SMM) reported a 11.4% YoY rise in revenue to S$1.05b and a 5% increase in net profit to S$118.7m in 1Q13, both accounting for about 20% of our full year estimates and in line with our expectations. Operating margin increased from 10.8% in 4Q12 to 13.7% in 1Q13, and the significant uptick could be partly because revenue recognition of the Sete Brasil drillship in the last quarter was not very significant. Management reiterated that enquiries remain healthy across the various business segments. SMM’s share price has underperformed the STI by about 15% YTD although there has been no change in the company’s fundamentals. In our view, investors seeking to hold a quality company for the longer term would find value in SMM. Maintain BUY with S$5.64 fair value estimate. 1Q13 results in line Sembcorp Marine (SMM) reported a 11.4% YoY rise in revenue to S$1.05b and a 5% increase in net profit to S$118.7m in 1Q13, both accounting for about 20% of our full year estimates. This is in line with our expectations 1Q figures also accounted for about 20% of the full year numbers in FY11-12. Meanwhile, what was surprising was a 55% fall in share of results of associates and JVs to S$6.2m in the quarter, due to poor performance from Cosco. Operating margin recovers in the quarter The increase in revenue was mainly due to higher revenue recognition from rig building activities. Operating margin increased from 10.8% in 4Q12 to 13.7% in 1Q13, and the significant uptick could be partly because revenue recognition of the Sete Brasil drillship in the last quarter was not very significant. Meanwhile, two jack-up rigs for Noble were recognized in the quarter and none of the semi-submersibles were recognized. Optimistic on order flow Management reiterated that enquiries remain healthy across the various business segments of ship repair, conversion, offshore platforms and rig building. Though pressure on margins remains due to stiff competition, we still see the group securing a good share of orders in certain niche areas. For instance, SMM is contending with Daewoo Shipbuilding & Marine Engineering to build two harsh environment CJ70 jack-ups for Maersk, according to Upstream. Maintain BUY After securing new orders worth about S$1.68b YTD (accounting for 42% of our full year estimate), the group’s net order book stands at S$13.6b with completion and deliveries till 2019. SMM’s share price has underperformed the STI by about 15% YTD although there has been no change in the company’s fundamentals. In our view, investors seeking to hold a quality company for the longer term would find value in SMM. Maintain BUY with S$5.64 fair value estimate.

Disclaimer for Research Report

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The offshores were mostly able to trade higher yesterday. 

Sembmar made the most gains yesterday while it manages to trade above its 20ma line again. It will likely to attempt to break its recent high of 4.37 level in order to reverse its current downtrend status. Breaking this resistance level will lead to testing of the next resistance at 4.42 level.

Kepcorp was also attempting to rebound and ended its day with a bullish reversal candle. If Kepcorp is able to close higher than 10.52 level, it will likely to be able to confirm the reversal and head towards its resistance at 10.80 level.

Sembcorp was seen struggling yesterday and ended lower.  It will likely to continue to attempt to rebound today.

Overall, the offshores will likely to gain bullish momentum to rebound today.

 

Rig builders: Keppel and SembMarine to gain from surge in jack-up rig orders, say analysts

It is no secret that Singapore’s two rig builders — Keppel Corp and Sembcorp Marine — have underperformed the benchmark Straits Times Index in recent months. Since the start of the year, shares of Keppel and SembMarine have taken a beating, falling 4% and 11% respectively, compared with a rise of 7.2% in the STI. The stocks have been dogged by concerns of margin pressure as both yards take on the construction of new and more costly rigs. Meanwhile, competition is rising from low-cost builders in China as well as the more experienced South Korean yards.

But things could be looking up for the rig builders soon. Keppel and SembMarine are on the verge of winning a slew of fresh orders for their in-house designed, latest generation CJ-70 jack-up rigs that could make shares of the two yards look attractive at their current levels, notes research house Barclays. That is because Norwegian oil and gas (O& G) producer Statoil is beginning to award contracts for the development of its Mariner heavy-oil field in the UK’s North Sea, and will require the use of a CJ- 70 jack-up rig to carry out drilling works at the field in the first few years of its development. The company expects to start production from Mariner in 2017 following its development. The field is estimated to contain about two billion barrels of oil and produce for up to 30 years.

Statoil, which has announced a budget of more than US$7 billion ($8.63 billion) to develop the Mariner oil field together with its partners, is reportedly in favour of awarding the first CJ-70 jack-up contract to New York-listed Noble Drilling, according to O& G newspaper Upstream. The driller is currently in talks with two Statoil-nominated yards — SembMarine’s Jurong Shipyard in Singapore and Daewoo Shipbuilding & Marine Engineering in South Korea — for the construction of the rig, and is expected to announce the award of a construction contract with the selected yard this month.

Tailored for work in harsh conditions, CJ-70 jack-up rigs can operate in water depths of about 500ft, drill to depths of over 35,000ft and command day rates of up to US$400,000. Costing up to US$600 million each to build, the rigs are also able to accommodate more than 100 personnel and house heavy-duty drilling equipment.

Besides the potential contract to Noble Drilling, Statoil is also expected to announce separate contracts for the construction of two CJ-70 jack-up rigs this month. The rigs, which will be owned by Statoil but managed by a selected operator, are intended to develop the Gullfaks and Oseberg oilfields off the Norwegian coast over a period of eight years from 2016, according to Upstream.

“With both [Keppel and SembMarine] the only yards globally with a track record in constructing [CJ-70] rigs, we believe they could be poised to benefit from any new orders,” write analysts from Barclays in an April 26 research note. “Based on earlier orders with both yards, we estimate that the price of each
[CJ-70] rig could range from US$450 million to US$600 million. The potential award of the three [Statoil] newbuilds could add US$1 million to US$2 billion to the order books of both companies.”

Meanwhile, other major drillers could be looking to add to their rig counts in the coming quarters too. Danish rig operator Maersk Drilling is looking to invest in more CJ-70 jack-up rigs for work elsewhere in the North Sea, and is reported to be exploring its options with SembMarine and Daewoo Shipbuilding
& Marine Engineering. The first of the two new jack-ups under negotiations is intended for a potential five-year contract from early 2016 in the Norwegian North Sea, according to Upstream. Maersk Drilling’s last newbuild CJ-70 jack-up contract was with Keppel in June 2012, which included an option for another
unit that has since lapsed. It has so far awarded three CJ-70 jack-up rig construction contracts to Keppel.

Barclays also believes established drillers such as Rowan Companies, Transocean, Atwood Oceanics and Diamond Offshore Drilling, which are current or past customers of Keppel and SembMarine, may also be planning to boost their inventory of jack-up rigs. Just last month, Keppel secured a US$225 million contract to build a B Class jack-up rig for driller Ensco. When completed in 1Q2015, the rig will be the fourth jack-up built by Keppel in Ensco’s fleet. Over the years, Keppel has delivered 16 newbuild projects to Ensco, with another four on order, including the latest contract.

“We believe the key beneficiaries within our coverage from a strengthening jack-up market could be the Singapore yards, especially Keppel, which has established a reputation for being the go-to yard for jack-ups,” Barclays writes in a recent research note. “There are concerns that a record year of deliveries for the company in 2013 and a large number of jack-ups entering the market in 2013 could result in a slowdown of new orders,” it adds. “However, we believe an improving demand outlook and a rig replacement cycle could help alleviate some of these concerns as rig owners continue to retire older units and high-spec their fleets.”

 

 

 

 

KEPPEL IN FAVOUR
Of the two rig builders, Barclays is more bullish on Keppel, which recently announced revenues of $2.8 billion for 1Q2013, down 35% from the year before, while earnings were down 56% to $331 million during the same period, owing to the erratic performance in Keppel’s property sector. “Today, Keppel has built about 50% of the world’s jackup rigs delivered since 2000,” Keppel CEO Choo Chiau Beng told analysts and reporters at the company’s 1Q2013 results briefing last month. “We also have a suite of 27 proprietary offshore rig designs in various stages of commercialisation.”

Indeed, Keppel has secured seven new B Class jack-up rig contracts in 1Q2013, as well as the Ensco contract and an order to build a US$226 million B Class jack-up rig from Singapore-listed Falcon Energy in April, taking new orders for 2013 to US$1.8 billion so far. The company is also seeing an increase in enquiries to build semi-submersible rigs from various customers, although it warns that these contracts could take some time to come through. And while the execution of new rig products such as semi-submersibles will likely result in lower margins as the yard improves on its abilities, operating margins for the rig building segment increased to 14.1% from 13.5% in 4Q2012, thanks to the early delivery of five B Class jack-ups.

“We believe Keppel’s ability to yet again deliver a sector leading margin despite the headwinds faced by the industry underlines its operational strength and strong outlook,” writes Barclays. The research house has an “overweight” call on Keppel and values the stock at $13.80, representing an upside of 30%.



SEMBMARINE CATCHES UP
Meanwhile, Lim Siew Khee of CIMB Research recently changed her top pick in the sector to SembMarine from Keppel following news of the potential Statoil contracts. She points out that SembMarine will likely win the lion’s share of the CJ-70 jack-up work from Noble Drilling and Maersk Drilling as Keppel focuses on executing its other jackup rig contracts. “While an order book decline could cap Keppel’s share price, a 9% potential increase in order book by end-2013 and order newsflow could catalyse SembMarine’s [share price],” she writes in an April 29 note. Lim is also expecting the rig builder to announce an improvement in its 1Q2013 margins when it releases its results on May 3. She is “overweight” on the stock, with a price target of $5.01, representing an upside of 16.8%.

Elsewhere, Yeak Chee Keong of Maybank Kim Eng also prefers SembMarine over Keppel. He is expecting 1Q2013 earnings to rise by 29% y-o-y to $146 million on the back of a 41% y-o-y rise in revenues to $1.3 billion for SembMarine. “Sequentially higher margins this quarter would not be difficult, given the low level of 10.8% registered last quarter…” writes Yeak in an April 25 report. “While Keppel offers better downside risk protection, we believe that SembMarine will outperform on an uptrend. We think that concerns on margins are overdone and expect upside this year. [SembMarine’s] current share price is unjustifiably low.” Yeak is calling a “buy” on the stock with a price target of $5.40, representing an upside of 26%.

 

The offshores were mostly trading slightly lower yesterday.

Kepcorp was seen closing lower for 3 consecutive days and there was no clear signs of reversal from the candles formation yet. Surprisingly, bullish signal was being triggered in the Histogram which can lead to a reversal movement. To confirm the reversal, Kepcorp must be able to close higher than 10.54 level today.

Sembmar failed to show any bullish movement yesterday and continues to face resistance pressure from its 20ma line at 4.28 level. With its modest reporting of its 1^st quarter earnings, it will unlikely to have much impact on the price action today.

Sembcorp is also facing resistance from its 20ma line yesterday. Resistance at 5.00 levle held well and prevent Sembcorp from trading higher. It will likely to continue to do so today.

Overall, the offshores will not be able to show any strong performance today as they are still unable to derive a good rebound.

 

Sembcorp Marine pops the champagne on $13.6b orderbook

Deliveries are extending up to 2019.

According to Nomura, Sembcorp Marine reported 1Q13 PATMI of SGD119mn, up 5% on y-y  basis though significantly lower than consensus of SGD158mn on sales  of SGD1.05bn (up 11.4% y-y). 

Higher profitability vs. 1Q12 was largely  attributable to strong EBIT margins at 13.7% during the quarter (12.2%  in 1Q12) which offset the strong decline in associate income and lower  interest income.

Here's more from Nomura:

Results were down sharply vs. 4Q12 though, with revenue coming in 23% lower while PATMI at SGD119mn was down 28.7% q-q. The sharpest decline in revenue was registered in the rig building segment (-31% q-q) followed by conversion and offshore (-12%).

EBIT margins, though, recovered strongly to 13.7% during the quarter (10.8% in 4Q12) as general and administrative expenses declined 37% q-q.

Management has maintained its positive outlook on the sector, citing  strong enquiry levels across business divisions and healthy  fundamentals for the offshore & marine sector driven by the projected  rise in offshore exploration and production spend.

Given strong  competition for new orders, the group will focus on improving productivity  and operational efficiency and ensuring timely and within-budget delivery  of orders to clients.

According to management, demand for ship repair  and upgrade work too remains high. The group has a strong orderbook  of SGD13.6bn with deliveries extending to 2019 while new orders  secured during the quarter amounted to SGD1.7bn.

 

SembMarine (S51.SG) is up 0.7% at $4.29, slightly outperforming the STI's 0.4% rise, despite reporting 1Q13 net profit of $118.7 million, up 5% on-year, but below some analysts' expectations.

" The revenue was a bit light for the quarter, but margins recovered a bit from the previous quarter," says Vincent Fernando, an analyst at Religare Capital, adding the market is likely relieved there wasn't a repeat of the fourth-quarter margin. But he notes, " the long-term outlook for margins is still down it's hard to extrapolate any major margin recovery," adding, SembMarine is also still warning about competition and margin pressure ahead.

Orderbook quotes suggest the stock isn't likely to retest its $4.32 intraday high.