ST Engrg: Marine arm has secured a contract worth EUR534.8m (approx $880m) to design and build 4 patrol vessels according to co’s proprietary designs and to provide associated logistic support for the Royal Navy of Oman. Construction will commence immediately with the first vessel expected to be delivered in 2Q2015 and the final vessel in 3Q2016.
This is co’s largest marine contract win over past few yrs. Earlier vessels of the same class are currently in use by the Sg Navy with some out-fitted with anti-submarine warfare.
Deutsche maintains Buy with TP$3.35 and currently trades at FY12E P/E of 16.3x and 5.5% yield. Believes co is well positioned with record order book of $12.3b as at Dec 11.
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