Kreuz

Kreuz: Group entered into a conditional shipbuilding agreement dated 5 Feb 2013 with a shipbuilder based in the People’s Republic of China, pursuant to which the Builder shall construct and sell a vessel to the Purchaser for an aggregate consideration of US$113.7m. Company is trading at 5.7x P/E, peer Swiber trading at 10.0x P/E. UOB KH has a TP of $0.53, implying a 15% additional upside to the last closing price. House thinks the upcycle in the oil service sector is intact, with the increase in charter rates as concrete evidence. House believes small-cap oil service stocks to continue to re-rate.