Sembcorp Marine has delivered a total of four jack-up rigs to its customers from December last year to June this year, all on-time or ahead of time, putting a stamp on its execution track record. This follows the seven jack-up rigs delivered last year (excluding December). On the semi-submersible front, following the delivery of the PetroRig1 to new owner Diamond Offshore, the group remains on track to deliveranother semi-submersible this year, with another three units per year in 2010 and in 2011.
On July 1st, the group announced that SeaDragon Offshore had awarded SMM’s Jurong Shipyard its second rig order, to complete (from a Russian-built new bare-deck hull) and deliver a Moss Maritime dynamically positioned (DP-3) semi-submersible drilling unit for US$237.3mn. This comes just three months after the group won its first US$247mn SeaDragon Offshore rig finishing contract. The second SeaDragon contract brings the group’s new orders to-date to S$964mn. However, management remains confident that more offshore rig and conversion contracts are in the pipeline, not just from re-directed rigs but also from national oil companies that are keen to exploit offshore territorial waters, based on the level of enquiries the group has seen. Petrobras in particular has been making active enquiries at the shipyards (in Singapore and in Korea) for new semi-submersibles and drillships for the Brazilian national oil company’s large deepwater finds in the Tupi and Jupiter fields. According to the group, Petrobras is still seeking to charter and tender for 28 new offshore rigs, whether semi-submersibles or drillships.
Our price target is S$3.22 based on our sum-of-the-parts (SOTP) valuation comprising a DCF valuation (over a 20-year period and incorporating a cyclical downturn in earnings from FY11) of the group’s shipyard businesses, which includes the three Singapore yards, as well as earnings from overseas yards including Cosco Shipyard Group, and its remaining 5% stake in Cosco Corp. Our WACC assumptions remain unchanged at 7.5%, with a zero terminal growth.
With FY09F and FY10F P/Es of 11.3x and 11.0x, SMM still trades at the lower end of its historical P/E band of between 7x and 28x. FY09-10F ROEs of above 31.6% and 26.8% are creditable for a shipyard group, in our view, and we expect dividends to be maintained for FY09F and FY10F, giving dividend yields of 4.4%, which are attractive relative to peers. SMM holds net cash of S$1.8bn as at March 2009, of which S$1.2bn are WIP payments, with steady cashflow seen from progressive recognition from its S$9bn order-book. Given that capex requirements can be met from its operating cashflow, we believe the group is unlikely to need to raise capital in the short to medium term.
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just like in joochiat, you pay premium for lesser experience... so with mother and daughter here.
Imho, both mother and daughter are attractive. If you have bullets, go for both.
IF bullet enough for one only, a better choice is the mother (of course she's older but more experience/and stable.) Market is currently not realizing the full values of her other valuables that she possess.
Sorry, no time to go into more details. Good luck.
mother cheaper than daughter. whack which one?
this one bought at lelong px of 1.5 in march and sold in june 3.08..then go into mid cap and penny.
you shd have bought and long this one at 1.5....
but dont worry, i think you still got chance to buy at 1.5 and below...i am 70% sure only right now.
This is a good counter, see what our brokers said.
OCBC Investment Research: BUY at $3.18, Fair Value at $3.67
CIMB: BUY at $3.18, Target Price at $3.48
DBS Group Research: BUY at $3.18, Target price at $3.70
| Updated: 4th August 2009, 1913 hrs |
| Sembcorp Marine's Jurong Shipyard secures $160m |
|
Sembcorp Marine, says its unit, Jurong Shipyard, has secured a 160 million dollar tanker conversion contract. Under the terms, Jurong Shipyard will convert an oil tanker into a Floating Production Storage and Offloading vessel. The converted vessel will be capable of processing more than 12 thousand barrels of oil per day. Sembcorp Marine says it expects positive contributions to its earnings from the contract for the current financial year. |
SINGAPORE (Dow Jones)--Sembcorp Marine Ltd. (S51.SG) Tuesday said
second-quarter net profit rose 7.6% on higher operating margins from its
rig-building business.
Net profit for the three months ended June 30 was S$138.1 million, up from
S$128.3 million a year earlier, the world''s second-largest builder of
offshore oil rigs in terms of orders said in a statement.
Sembcorp Marine is the marine engineering arm of conglomerate Sembcorp
Industries Ltd. (U96.SG).
Sembcorp Marine''s earnings exceeded the average forecast of S$123 million
from five analysts polled by Dow Jones Newswires.
Revenue was S$1.5 billion, up 8% from S$1.39 billion a year earlier.
"Notwithstanding the current economic downturn and restricted financing and
liquidity environment for owners, the long-term fundamentals for the marine
and offshore industry remain resilient, with oil prices back to the
US$60-US$70 per barrel range," the company said in a statement.
Sembcorp Marine now has an order book worth S$7.9 billion with deliveries
scheduled through 2012.
Late Monday, the company said a unit has sued Societe Generale S.A.
(GLE.FR) to recover US$198.9 million in payments to the bank related to a
number of foreign exchange transactions made by an executive, which
Sembcorp alleges were unauthorized.
In October 2007, Sembcorp sacked its finance director, Wee Sing Guan,
claiming that he had "entered into various unauthorized transactions"
through Jurong Shipyard Pte. Ltd. and misled the company about the dealings
that amounted to US$258.7 million in losses.
Societe Generale was one of the 11 institutions involved in the trades. Wee
has disputed Sembcorp''s claim that the trades were unauthorized.
The French bank declined to comment on the suit.
second-quarter net profit rose 7.6% on higher operating margins from its
rig-building business.
Net profit for the three months ended June 30 was S$138.1 million, up from
S$128.3 million a year earlier, the world''s second-largest builder of
offshore oil rigs in terms of orders said in a statement.
Sembcorp Marine is the marine engineering arm of conglomerate Sembcorp
Industries Ltd. (U96.SG).
Sembcorp Marine''s earnings exceeded the average forecast of S$123 million
from five analysts polled by Dow Jones Newswires.
Revenue was S$1.5 billion, up 8% from S$1.39 billion a year earlier.
"Notwithstanding the current economic downturn and restricted financing and
liquidity environment for owners, the long-term fundamentals for the marine
and offshore industry remain resilient, with oil prices back to the
US$60-US$70 per barrel range," the company said in a statement.
Sembcorp Marine now has an order book worth S$7.9 billion with deliveries
scheduled through 2012.
Late Monday, the company said a unit has sued Societe Generale S.A.
(GLE.FR) to recover US$198.9 million in payments to the bank related to a
number of foreign exchange transactions made by an executive, which
Sembcorp alleges were unauthorized.
In October 2007, Sembcorp sacked its finance director, Wee Sing Guan,
claiming that he had "entered into various unauthorized transactions"
through Jurong Shipyard Pte. Ltd. and misled the company about the dealings
that amounted to US$258.7 million in losses.
Societe Generale was one of the 11 institutions involved in the trades. Wee
has disputed Sembcorp''s claim that the trades were unauthorized.
The French bank declined to comment on the suit.
The general market is still weak and i dont see much upside in this in near term.
Wow, a fabulous DRAGON of enormous size in the SEA! LOL
Monday, July 13, 2009
SEMBCORP MARINE’S JURONG SHIPYARD SECURES A SECOND RIG ORDER
FROM SEADRAGON OFFSHORE LIMITED
Singapore, July 2, 2009: Jurong Shipyard (“Jurong”), a wholly-owned subsidiary of
Sembcorp Marine, has secured a second SeaDragon rig order from Oban B Limited
(“Oban B””) to complete and deliver a Moss Maritime Full Dynamically Positioned
(DP-3) Semi-submersible Drilling unit.
The 6-column Bare Deck hull, built in a Russian yard, arrived at Jurong Shipyard in
early June 2009. Following arrival, Jurong will now proceed with the construction,
outfitting, furnishing, equipping, testing and completion of the bare-deck hull into an
ultra-deepwater semi-submersible drilling rig. The second unit is scheduled for
delivery by end June 2011. The shipyard’s contract value for the second unit is
US$237.3 million, excluding equipment supplied by the owner.
This new rig will be built for a water depth rating of 10,000 feet and maximum drilling
depth of 30,000 ft. The rig’s ability to operate even in harsh environment gives it the
multi-region flexibility to operate worldwide as compared to its peers.
Mr George Sutherland, Technical Director of Oban B said “We are delighted to be
working with the world class team at Jurong on this second project, which we are
confident will result in a first class asset for charter in 2011.”
Mr. Don Lee, Jurong Shipyard’s Senior General Manager of Offshore Division said
“We thank SeaDragon again for their trust and commitment in working with Jurong to
realise this option after the first contract was signed in April 2009. These two stateof-
the-art semi-submersible rigs will complement the range of semi-submersibles
that Jurong is building and demonstrates our versatility in undertaking projects with
diverse complexities. We now have two first of its class semi-submersible rigs to be
delivered.
We are pleased that, despite the current challenges due to the economic downturn
and the credit crunch, our order book continues to strengthen. This rig order is
testimony of the confidence that our clients, partners and vendors have in the
deepwater market and in particular, Jurong’s proven track record and project
execution capabilities. We are committed to deliver on our promise and to build on
this foundation for many years to come.”
Sembcorp Marine expects positive contributions to its earnings from the contract for
FY 2010 and FY 2011.
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dont mean to highlight in red (below msg) just dunno why turns out red. haha! funny!
DBSV upgraded to buy 2.74. TP - 3.26. But, they do caution as below :
Expect new order wins in 2H09, our assumption
unchanged at S$3b.
expectations that any SMM’s new order win is the start
of an uptrend. We maintain our view that an uptrend in
new order wins require : 1) An easing of credit crunch
through a reduction in credit spread and equity funding
requirement, and 2) A lowering of still high construction
costs. These pre-conditions are currently not met yet.
Though they upgraded from hold to buy, Shall wait for clearer sign before buying....
Will there be any Marine play next week? since oil looks like crawling back a little?
How come at 5.00pm, I notice there is this buy queue price extremely low like 2.50 or 2.40 and sell queue extrmely high? How could one possibly queue at 'more than 10 bits'? Not only this counter, but some of the counters do have this queue pattern . What is this supposed to mean? Can share here? Tks
In up moving trend. Bad reports or news cause resistance.
Actually when i read again, it said between $72 - $76 is a 'corrective mode' and there will be a sell down. So has it started ?? o ris it in consolidation mode as some predicted ? Scary!! Though people say the stock mkt is in consolidation mode and one chooses he/her own trade and own confidence to trust his/her money with the stock mkt, win or lose , nobody can say anything.
I saw bloomberg news that when crude oil hit $76.00, it will drop 30% next few months!! I posted this in IndoAgri. If this is the case, will sembmarine be affected since it is a oil-sensitive stock?? So once this stock surge with oil and when oil hits $76.00, does it mean one is to sell cos the whole stock market is 'news' driven and besides reading the TA charts, news (especially US) also an imprtant factor to consider?
sembmarine looking very likely to move up
http://skybach.wordpress.com/2009/06/11/sembmarine-poised-to-break-on-high-oil-prices/
It is ok.
In fact the bull for this counter will run into a lots of resistances before it reaches a new recorded high. (Just my view, Not an inducement to trade).
Actually my sentiment was bearish few months ago. I need to thank one person here. He wake me up. Hope he is reading this post. Other counters posting are too messy.
Cheong Wee, thank for waking me up. I won't forget your posting on second derivative on sentiment and the picture of the zombie.
You are a smart guy but your sentiment are blinded by the 5 storms. Come on wake up.. Cheong Wee.
I like your name, there is a "CHEONG"
Sorry, spelt one word wrongly, 'truly' and not 'truely'. School time, Always make this mistake until the teacher kept on making me correct many times yet, still spelt it wrongly. LOL