Here are possible order wins Sembcorp Marine could ink soon
Some are worth US$600m.
According to CIMB, Sembcorp Marine has secured a second semi-submersible well-intervention rig order (US$346m) from the Helix Energy Group, for delivery in mid-2016.
The rig, named Q7000, will be built using Sembcorp Marine?s design. These rigs are able to perform conventional and extended top-hole drilling, subsea construction, decommissioning well-intervention, coiled tubing operations and twin ROV deployment.
Here's more from CIMB:
The contract is 10% lower than that for the first semi-sub wellintervention rig ordered by Helix in Mar 12 as it is of a smaller size. Nevertheless, it brings the company?s YTD new orders to about S$3.9bn, or 78% of our S$5bn target.
We expect more orders before year-end. Near-term possible contract wins could come from Oslo-listed Awilco Drilling, which is in talks with Sembcorp Marine, Cosco Corp and Daewoo Shipbuilding for a Moss CS50 design semi-submersible worth US$600m with options for up to two more.
We upgrade Sembcorp Marine (SMM) from Neutral to BUY with a higher TP of SGD5.60. Although a laggard, with its share price returning -4.4% YTD vs the STI?s -1.9%, we see upside, fuelled by stronger-than-expected order wins and easing competition as commercial ship orders recover and China tightens shipyard credit, as well as stronger earnings going into FY14. Our new TP values SMM at a 18.6x FY14F P/E.
Helix places USD346m order for semisub well intervention rig. The latest order from Helix lifted SMM?s YTD order wins to SGD3.93bn. We estimate its net orderbook at SGD14.8bn, with deliveries extending up to 2019. This is the second well intervention rig Helix is ordering from SMM. The DP3 semisub, to be named Q7000, is based on a design jointly developed by SMM and Helix. It is scheduled for delivery in mid-2016. Raising order win and FY15 EPS estimate. As SMM?s new order is likely to beat our initial expectation of SGD4.0bn for 2013, we raise our order win forecast to SGD4.5bn, which accordingly results in a 4% upward revision in our FY15F EPS.
New yard to drive productivity gains. The start of operation of SMM?s new yard in Tuas will add significant capacity to the group and drive the next level of productivity gains. The new yard will carry out repair works while the Jurong shipyard will focus on newbuilds. May gain pricing power on easing competition from China. We believe the competition for rig orders may ease with tighter shipyard credit and the rising number of yards being closed in China, as well as Dalian Shipyard filling significant orders this year. The potential recovery in commercial ship orders may also ease the competition for offshore orders.
Upgrade from Neutral to BUY, with SGD5.60 TP. We raise our SOP TP from SGD4.65 to SGD5.60 as we roll forward our valuation from FY13F to FY14F and peg a higher target 18x P/E (previously 16x) to reflect the strengthening industry dynamics of the Singapore yards. At our new TP, the implied valuation is 18.6x FY14F P/E.
Sembcorp Marine (SMM): CIMB maintains O/p with $4.80 TP. House note that Subsea well-intervention rigs represent a new avenue for SMM to expand into, leveraging its rig-building expertise and allowing it to stay competitive in the O& M industry. Maintain Outperform and target price, still at 14x CY14 P/E, 10% below the O& M industry?s mid-cycle valuations. Catalysts are expected from stronger 2H13 earnings. With around 4% dividend yields, expect total returns of c. 13%. Order book is about $14.8b, up 17% since end-2012.
Cosco: Scores series of contract orders execution remains the key Cosco Corp has announced a series of contract wins worth ~US$566m, alongside several options. These involve plans to build four platform supply vessels (PSVs), two salvage lifting vessels, two 21,000 dwt module carriers and four dry bulk carriers of 64,000 dwt. Separately, Axis Offshore has also exercised an option for 1 semi-submersible accommodation rig valued at more than US$200m. While the above contracts are not expected to have a material impact on the net tangible asset and earnings per share of Cosco for FY13, it brings the group?s year-to-date orders secured to US$1.7b, and its total order book to ~US$6-6.5b, underpinning earnings visibility till FY15. In its recent quarterly earnings, Cosco?s management continues to guide for a cautious outlook on the sector, citing an increasingly competitive and challenging environment ahead. We opine that while the latest order wins could provide some catalyst to share price, execution remains a key uncertainty for the group. At current price, valuations does not appear cheap, with Cosco trading at 27.8x forward P/E versus closest peer Yangzijiang of just 7.2x P/E.
SMM: has secured a US$346m contract to build a second semi-sub well intervention rig for Helix Energy Solutions Group, a mkt leader in subsea well intervention services. Scheduled for delivery in mid-2016, the rig has the ability to operate in deepwater operations worldwide, including the North Sea and West of Africa. The latest order brings year-to-date orders secured to $3.9b, well on track to meet Maybank KE's full year forecast of $5.2b. This brings SMM?s net orderbook to a record high of $14.8b, with deliveries extending till 2019.
The offshores were struggling to trade higher yesterday as they ended up trading mixed.
Kepcorp continues to face resistance at 10.45 level which it is still having problem breaking it. This is the 3rd day it is testing it and retracement probability is now getting higher.
Sembcorp also faces 5.00 resistance level which if fails to break it yesterday also. Selling pressure might set in but it will be support by its support at 4.95 level.
Sembmar had similar actions too and it is facing resistance at 4.40 level. It will likely to trade between support of 4.36 and 4.40 resistance level today.
Overall, the offshores will likely to trade in a tight range today.
Helix Signs Agreement with Sembcorp Marine?s Jurong Shipyard to Build Q7000 Semisubmersible Well Intervention Vessel
September 11, 2013 07:36 PM Eastern Daylight Time
HOUSTON--(EON: Enhanced Online News)--Helix Energy Solutions Group, Inc. (NYSE: HLX) announced today that it has signed a contract with Sembcorp Marine?s subsidiary Jurong Shipyard in Singapore for the construction of its Q7000 newbuild semisubmersible well intervention vessel previously announced by Helix in July.
Owen Kratz, Helix?s President and Chief Executive Officer, stated, ?We are pleased to work with our trusted partner Jurong Shipyard on our second newbuild semisubmersible well intervention vessel, to be named Q7000. Based on strong market demand and our record of operating specialized deepwater well intervention assets, we believe that this vessel, with its enhanced features and capabilities, will be a valuable addition to our growing fleet.?
About Helix
Helix Energy Solutions Group, headquartered in Houston, Texas, is an international offshore energy company that provides key life of field services to the energy market. For more information about Helix, please visit our website at www.HelixESG.com.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are " forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any statements regarding our strategy any statements regarding future utilization, any projections of financial items future operations expenditures any statements of the plans, strategies and objectives of management for future operations any statement concerning developments any statements regarding future economic conditions or performance any statements of expectation or belief and any statements of assumptions underlying any of the foregoing. The forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors including but not limited to the performance of contracts by suppliers, customers and partners actions by governmental and regulatory authorities operating hazards and delays our ultimate ability to realize current backlog employee management issues complexities of global political and economic developments geologic risks volatility of oil and gas prices and other risks described from time to time in our reports filed with the Securities and Exchange Commission (" SEC" ), including the Company's most recently filed Annual Report on Form 10-K and in the Company?s other filings with the SEC, which are available free of charge on the SEC?s website at www.sec.gov. We assume no obligation and do not intend to update these forward-looking statements except as required by the securities laws.
The offshores were did not retrace yesterday and instead they attempted to rebound back to their resistance levels again.
Kepcorp was seen returning back to its 50ma line at 10.45 level yesterday and test it. However, it failed to break it and might be forming a bearish dragonfly doji pattern.
Sembcorp also returned back to its 50ma resistance line and failed to break it yesterday. Sembcorp might continue to test this resistance at 5.00 level today.
Sembmar also had similar action and it stayed at its 50ma resistance line. Sembmar will continue to test this 4.40 level today before any retracement action can follow.
Overall, the offshores are at resistance level and were unlikely to break them today.
The offshores managed to stage a rebound yesterday after testing their support levels.
Kepcorp was able to recover back from its support of 10.00 level and it will likely to continue to attempt to rebound towards its resistance of 10.28 level.
Sembcorp also rebounded healthily from its support of 4.82 level and it is now testing its resistance at 4.90 level. Sembcorp will likely to continue to test this resistance level today.
Sembmar was seen struggling to rebound yesterday as it faces a minor resistance at 4.22 level. Sembmar might continue to attempt to break this minor resistance level today.
Overall, the offshores does have a bit of upside room to rebound today before it can continue its downtrend movement.
Semb Marine has been supported above the 4.10 level since Jan 2012. This support is likely to hold. Possible to accumulate on Dips near the 4.10 support level for a potential rebound. As long as 4.10 is a support, a rise towards 4.30 and 4.40 seems likely. A break below 4.10 can lead it to test critical 4.00 fast. We would cut all long positions and take up short positions on the breakdown of 4.00 psychological support with a near term target of 3.65.
This is one of the good counter in SGX and is good to accumulate for mid term investment when it trading below 4.20. I am vested ... wish me good luck ya.
The long-term downtrend is still intact Technicals do not look positive after counter broke below its support at $4.19 today. A close below could indicate further downside towards its next level of support at $4.11.
The long-term downtrend is still intact Technicals do not look positive after counter broke below its support at $4.19 today. A close below could indicate further downside towards its next level of support at $4.11.
The offshores were trading mixed again yesterday as they trade in various directions.
Sembcorp was surprisingly strong yesterday after its announcement of a contract. This helped Sembcorp to not only hold at its support of 4.90 level, it also helped Sembcorp to break its immediate resistance level at 4.95 and tested the next resistance of 5.02 level. Sembcorp will likely to continue its rebound attempt today, testing 5.02 resistance level.
Sembmar was seen trading flat after testing its support level at 4.30 level. 4.30 support level held well as Sembmar formed a white candle after testing it. However, its long upper shadow shows that Sembmar is facing strong resistance at 4.36 level which it failed to break yesterday. Hence, Sembmar will likely to continue to attempt to rebound towards 4.36 level today.
Kepcorp suffered selling pressure yesterday but it managed to recover most of its lost grounds after testing the weekly low of 10.13 level. With its white candle formation, it might even attempt to rebound back to its recent break down level of 10.28 level before heading lower to another support of 10.06 level.
Overall, the offshores are holding their support level and attempts to rebound can be expected.
Post Reply
