Keppel Corp

Keppel Corp: has been awarded a contract from Maersk Drilling to build a repeat Gusto MSC CJ70 ultra harsh environment jackup rig worth ~US$560m. The rig is scheduled for delivery in 1Q15, and will be deployed in Dagny field in the Norwegian North Sea for Statoil when completed. This is the third CJ70 jackup rig that KEP is building for Maersk Drilling; note that it is priced 20% higher than the previous order for two such rigs in Feb ’11. The latest contract brings KEP’s ytd order book to $6.9b (incl LOIs for 5 semis from Sete Brasil and 1 semi from Floatel). This compares with the $9.4b contract wins for the whole of FY11. KEP remains a favorite amongst analysts with 21 Buys, 4 Holds, and 1 Sell, with TP ranging btwn $10.80 – 14.80. The stock trades at 8.2x P/E. Technically, the May trough at $9.80 may offer support, while the 200-day exponential moving average at $10.33 may offer resistance.