Keppel Corp

Keppel Corp: BNP notes KEP’s “near customer, near market” strategy has positioned it to win orders in overseas regions with strong demand, such as Brazil, Mexico, Azerbaijan and the Middle East, allowing the rig builder to hold its market shares at 33% in 2011-13 (24% in 2013). Nevertheless the house lowers 2013-14 forecasts by 8% and 4%, due to delayed recognition of new orders, particular from the Petrobras-related semi-sub projects. Following its earnings forecast revisions, the house lowers its SOTP-based TP to $12.50 (from $13), for potential upside of 15%. This equates to a FY14e P/E of 12.7x and 2.1x P/B. BNP maintains its Buy rating.