Keppel Corp

Keppel Corp: CS maintains its OUTPERFORM rating and $12.90 TP on counter, being its top pick within Singapore's capital goods sector. House believe it will be a key beneficiary of Mexico Energy Reform, with the recent MOU signed with PEMEX to jointly develop, own and operate a yard in Mexico. Despite Chinese competition, CS believe Keppel is well positioned in the rigbuilding market due to its wide offering of proprietary rigs and established ‘near market, near customer’ strategy. Keppel has secured about $6.7b of contracts YTD, representing 96% of our 2013 forecast of $7.0b. Next year, house expect $7b of orders in 2014, driven by strong jackup demand from Mexico, as well as options exercised by Transocean for more jackup rigs.