SembMarine

SembMarine: OCBC upgrades to Buy from Hold, keeping a $5.12 fair value. Note that at current price levels, see value emerging. House says the outlook remains positive, with current WTI oil prices around US$88/bbl still above the US$70-US$75/bbl threshold level for a safe cushion for viable sector investments, with recent comments from offshore drillers reflecting their belief in strong industry fundamentals and interest in more newbuilds. Expect continued capital expenditure in the sector which takes a long-term view due to strong industry fundamentals and the long lead time required for offshore projects. OCBC says SembMarine's strong outstanding orderbook, at a net $7.4b, with deliveries stretching until 2Q15, offers defensiveness and good earnings visibility amid global economic uncertainty and a lack of clarity on the general corporate earnings outlook. It notes year-to-date orders of $3b are 34% of the house's full-year estimate.