Sembcorp Marine

Sembcorp Marine: CIMB maintains Hold with $4.30 TP. The house believe that more relaxed payment terms (10:10:80) were one reason for Hercules Offshore (previous customer of Keppel) to award SMM its latest US$236m jack-up contract. The positive is, this rig will be backed by a 5-year charter to Maersk, for deployment in the North Sea. It will also probably be the only jack-up ordered in 2014 with a charter contract, with most units built on a speculative basis. This brings SMM’s YTD orders to $1.93b and order book to S$13.2b. The house keeps its EPS as they have forecast S$4.5b of orders for 2014. Prefer Keppel Corp in the O&M sector.