Disclaimer

Disclaimer:-Please note that all such analysis is provided by way of information only. All of the information was and should be taken as having been prepared for the purpose of reference only and that none were made with regard to any specific investment objective, financial situation or the needs of any particular person who may receive the analysis. Any recommendation or advice that may be expressed in or inferred from such analysis therefore does not take into account and may not be suitable for your investment objective.

Tuesday, June 17, 2008

Semb Marine Research Report

by CIMB-GK (17 June)

Although Sembcorp Marine's year-to-date order flow has been slower at $19b versus Keppel Corp's $3.4b, we believe there is upside for orders in 2H2008, to meet our $5b target for the year.

There are two semi-submersible options outstanding from Atwood and Seadrill for delivery in 2011 and 2012 respectively. We are confident that these will be formalised soon.

We also believe a contract for Petrobas' mega-FPSO, P-62, could be finalised in the coming weeks, potentially boosting Sembcorp Marine's order book by US$1b.

In conjunction with our bullish view on the offshore and marine cycle supported by the deepwater drilling market, we are raising our order-win assumptions for Sembcorp Marine for FY2009-2010 by 14%-20%, to $4b and $3b respectively. This lifts our earnings estimate for FY2010 by 9%.

-Research Report by CIMB-GK (17 June)
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