Sembcorp Marine

Sembcorp Marine: Citi maintains Buy with TP$6.10 on discussion with mgmt. Recent drillship win with Sete Brasil shows shift in co’s capabilities from jack-ups/semi-subs to drillships. SembMarine also believes its new yard in Espirito Santo is ideally located and will be able to obtain maintenance and repair contracts near the oil-rich Tupi yields. Demand is expected to remain firm across jack-ups, semi-subs and drillships with rigs prices to appreciate slightly resulting in higher margins. Its new yard in Sg will also be fully operational by 2013 and add $500-600m rev of high-margin repair work.