Seatrium (formerly known as SembCorp Marine) *Official* (SGX: S51)

lcornwisky

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sembmarine.jpg


going down

i like using candlesticks
 

Zaalaa

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wow marine business still doing so well?

no one's buying anything. what are they sellling anyway? who are their customers? who is benefiting from their business?

marine business still confident? charity show ah?

would you rather work for free? or don't work at all?
 

lcornwisky

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there are two stocks sci and sembcorp marine....

i base my trades based on candlesticks however charts shows that its bearish
 

lcornwisky

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i should put all these in charts....actually i have long dabbled in us stocks making the transition to sg stocks again after attending ronald k session
 

berieng

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I buy SCI but not SCM due to their businesses...
Just like i buy CDG and not sbstransit...
 

Perisher

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i should put all these in charts....actually i have long dabbled in us stocks making the transition to sg stocks again after attending ronald k session

Start your chart TA thread? will take a look. Suddenly remember last time got a few TA thread, dunno where it disappear to liao.
 

sneggg

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Today's highlight
Today's Highlight keeps you up to date with the latest happenings in markets, including stock research from Macquarie, important news flows, upcoming announcements and economic updates.

29 Apr 15 SembMarine – MER publishes report with $4.00 target price
28 Apr 15 DBS result analysis – MER targets S$22
27 Apr 15 China’s rally to continue with help from regulators?
24 Apr 15 SGX – Target price increased to $10
23 Apr 15 MER targets another 21% upside to Keppel Corp
22 Apr 15 More room for HSI rally?
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SembMarine – MER publishes report with $4.00 target price
29 Apr 15
Share


Code Name Type Expiry Exercise Price
AJMW SembMar MBeCW160104 CALL 04 Jan 16 3.00
AIPW SembMar MBeCW151102 CALL 02 Nov 15 3.30




SembCorp Marine fell 2.3% yesterday after releasing their first quarter 2015 (1Q15) results on Monday evening which were only 19% of Bloomberg’s analyst polls. Nevertheless, Macquarie Equities Research (MER) in their research report published on Monday 27 April maintained their Outperform rating on the stock with a 12-month target price of $4.00. Here’s why…

SembMarine reported S$106m profit, down 13% year-on-year (YoY) due to lower revenue booking from rig building and lower ship repair revenues in the quarter. Pressure from weak ship repair orders and Brazil payment delays has started to show.

Impact
Lower ship repair revenues key reason for the miss: Ship repair revenues came in the lowest since 2009 at only S$100m versus a run-rate of S$150m per quarter in 2014. MER believes the ticket size of vessels has gone down significantly in 2015, thus hurting revenue recognition and margins.

EBIT margin of 10.6% due to S$248m of Brazil drillship revenue booking plus lower ship repair revenues: MER’s calculations suggest that 19% of SMM’s 1Q15 revenues of S$1.3bn came from Brazil Drillships which hurt the margins. In addition, lower ship repair revenues also limited the upside.

Net debt increases as Brazil pressure mounts: Net debt increased to S$908m (29% net debt / equity) vs S$709m in 4Q14 (24% net debt / equity). MER believes it is due to the stoppage of Brazil payments from November ’14.


Key things to look forward to
Orders from “non-rig” segment like fixed platforms: SembMarine did not declare the value of the Semi-sub crane order that it received in the quarter which MER believes is in the range of around S$450m. However, large fixed platform orders will be key to this year’s order inflow in the absence of rig orders, in MER’s view.

Order book of S$10.6bn at the end of 1Q15 with 55% in Drillships: 42% of this order book is in Brazil. Drillship execution is key to SMM’s revenue booking over next 12-18 months in MER’s view.

42% order book in Brazil; Deliveries could be pushed out amidst payment delays: SembMarine said that while Sete Brasil sorts out its payment issues, they are positive on no order cancellations but the deliveries could be pushed out (from current schedule of 2015 to 2019). MER’s calculations suggest that SembMarine has S$4.5bn outstanding order book / payment from Sete Brasil.


Action and recommendation
MER has an Outperform rating on SembMarine – target price S$4.00. MER has however reduced earnings by 3% each for next 2 years on slightly lower margins.

Stock should continue hovering around S$2.90-3.20 levels until substantial orders come in: Quarterly revenue booking varies a lot between quarters for shipyards and thus is not indicative of future quarterly revenues in MER’s view. SembMarine’s stock performance would entirely depend on its capability to win ‘non-rig’ orders in 2015E, in MER’s view.
 

StealthNinja

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IMO rebounding is very limited until really some positive news of winning contract or oil rally if not will see hovering at 2.9 to 3.05 range.. :(
 
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