O&M

O&M: MKE highlights insights from key OSV players. First, OSV operators/owners remain optimistic of long term fundamentals of the offshore O&G cycle on account of stable oil price (sustained at US$100/bbl levels), structural rise in energy demand and continued increase in rig count. This should benefit oilfield services companies like Ezion (Buy, TP: $2.70) and Mermaid Maritime (Buy, TP: $0.59). Second, MKE guides for higher demand of more sophisticated OSVs. This has occurred, even in Indonesia and India where traditionally tolerance for older vessels have been higher. Operators like Gulfmark, Perdana Petroleum, Pacific Radiance and PACC Offshore Services Holdings are committed to upgrade their fleet, as a quarter of their fleet is more than 25 years old. In the midst of this, OSV shipbuilders like Vard (Buy, TP: $1.27) and Nam Cheong (Buy: TP $0.45) stand to gain on stronger order momentum