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Sembmarine

 

Rush of orders before year-end

Sembmarine’s latest Letter of Intent from Prosafe for a semi-sub accommodation rig (estimatedat US$295m) has reinforcedour conviction that this cycle willbe dominated by a more diversified mix of vessels with higher contract values.

Non-Brazilian orders are catching up towards year-end, potentially lifting itsYTD ordersto about S$9.5bn. Maintain Outperform and EPS estimates. Our target price is still based on 18x CY13 P/E (+1SD from 5-year mean). Stronger-than-expected margins and high oil prices should continue to catalyse the stock, in our view.

What Happened

Sembmarine has signed an LOIwith a repeat customer, Norwegian-based Prosafe AS,for the construction of a semi-submersible accommodation rig. The rig will have the same design as Safe Boreas,being built atJurong Shipyard. Delivery is expected in 2Q14. In addition, Sembmarine has granted two options for further newbuilds, bringingto three thenumber ofoutstanding options it has with Prosafe. The two can be designed for either Norwegian Continental Shelf or worldwide operations.

What We Think

This LOI is one of two options granted by Sembmarine to Prosafe in Dec11, along with the

To stay competitive against the Koreans in the drilling rigmarket, Singapore yards have been broadeningtheir product mixesto cover harsh-environment products that command higher values. These rangefrom accommodation rigs (US$290m-300m) to heavy-duty and high-spec jack-ups (from US$450m) and FPSO topside fabrication and integration. The latest contracts from Petrobras amounted to US$674m forSMM and US$950m forKeppel.SafeBoreascontract at US$291.6m. We estimate that the value of thefinal contract could be in asimilar range. This could bring Sembmarine’s YTD ordersto S$9.5bn (Petrobras: S$6.9bn, non-Petrobras: S$2.7bn), in line with our S$10bn expectation.

What You Should Do

Stay invested as its order pipeline remains strong. SomeUS$6bn of orders could be awarded to Sembmarine from now till 2013, in our estimation.

CIMB Analyst

Lim Siew Khee

T(65) 62108664 Esiewkhee.lim@cimb.com

 

More positive newsflow from the O& M sector.

Petrobras said will contract 15 production platforms by 2017.

It is currently evaluating potential shipyards able to meet the orders' requirements.

The awarding of the contracts will start still in November this year.

This should benefit Keppel Corp and SembCorp Marine.

 

SembMarine
SembCorp Marine (SembMarine) is currently consolidating into a symmetrical triangle, both trendlines act as barriers that prevent the price from heading higher or lower, but once the price breaches one of these levels, a sharp movement often follows. The resistance is at $5.20 and if this is broken, prices may head towards $6.00. Alternatively, if prices drop below $4.35, we may see it headed towards to the $3.70 region.

 

[Trading Central] Sembcorp Marine: capped by a negative trend line.

Update on supports and resistances.

Short Term View (Rise, Limited Rise, Consolidation, Limited Decline, Decline)	Limited Decline
Change In Short Term View	None
Medium Term View (Bullish, Range, Bearish)	Range
Change In Medium Term View	None

Pivot: 5.19

Our preference: Short positions below 5.19 with targets @ 4.75 & 4.54 in extension.

Alternative scenario: Above 5.19 look for further upside with 5.38 & 5.55 as targets.

Comment: as long as 5.19 is resistance, likely decline to 4.75.

Key levels
5.55
5.38
5.19
5.06 last
4.75
4.54
4.38

Copyright 1999 - 2012 TRADING CENTRAL



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Company future is good:)

paul1688      ( Date: 17-Sep-2012 16:24) Posted: SembCorp Marine has acquired the entire share capital of wholly-owned subsidiary of SLP Engineering (SLP). SMM will pay about £2.5m for both shares and settlement of the intercompany loans of SLP. The deal will be completed only upon certain conditions being met. The NTA of SLP is about £0.7m. Following the acquisition, SMM will now have a footprint in the UK, providing synergistic support and reaching out to its North Sea clientele. Sembmarine SLP offers the opportunity for future growth in new business areas within the renewable energy sector as well as in the fabrication of minimum facilities platforms (MFP) for marginal oil and gas fields in the North Sea and Asia Pacific waters.

 

SembCorp Marine has acquired the entire share capital of wholly-owned subsidiary of SLP Engineering (SLP). SMM will pay about £2.5m for both shares and settlement of the intercompany loans of SLP. The deal will be completed only upon certain conditions being met. The NTA of SLP is about £0.7m. Following the acquisition, SMM will now have a footprint in the UK, providing synergistic support and reaching out to its North Sea clientele. Sembmarine SLP offers the opportunity for future growth in new business areas within the renewable energy sector as well as in the fabrication of minimum facilities platforms (MFP) for marginal oil and gas fields in the North Sea and Asia Pacific waters.

 

u are earning, my friend...

merlin_magic      ( Date: 14-Sep-2012 20:50) Posted: Jialat..I was so busy that I did not dispose my stock at 5.01... Stuck liao...

 

Jialat..I was so busy that I did not dispose my stock at 5.01... Stuck liao...

 

I think can Buy  SembMar today.

Entry: $5.070 to $5.090

Stop-Loss: $4.930

More on my Blog at Alex Trades.

Good luck.

 

 

flag formation in weekly chart

 

below $5.50 is a Strong Buy , $10 Billions of contract till 2015 .

 

Up Above $5 today .

 

60% order are in Jurong Brasil Yard. The Yard is not even completed, how to start to build the 60% order?

 

no QE, SIA n SPH also die die

khng2012      ( Date: 10-Sep-2012 11:05) Posted: See how is QE3. Sembmar will be the first to be hammered if bad new is out. Except order from Petrobras, Sembmar has nothing left, poor result, poor order in singapore yard, poor profit margin and etc...

 

Cos $5.01 is considered very high price....

 

See how is QE3.

Sembmar will be the first to be hammered if bad new is out. Except order from Petrobras, Sembmar has nothing left, poor result, poor order in singapore yard, poor profit margin and etc...

 

why do u say foolishly?

merlin_magic      ( Date: 10-Sep-2012 09:57) Posted: I have foolishly jumped in at 5.01 using CPF ammo... Would I regret later?

 

I have foolishly jumped in at 5.01 using CPF ammo... Would I regret later?

 

Buy before QE3 next week , Target $5.50+