Kim Heng Offshore Marine

Kim Heng Offshore Marine: OCBC Initiates coverage with Buy call and $0.34 TP. The house notes that with over 40 years of experience, Kim Heng Offshore & Marine offers a one-stop comprehensive range of products and services that caters to the offshore oil and gas industry, with its core competencies in rig repair and maintenance, refurbishment of rigs, and supply chain management. The group enjoys good relationships with established players in the industry, counting Transocean and Seadrill as a few of its key customers. The ongoing requirement for rig maintenance and repair also means that it is less cyclical than the newbuild business, and ad-hoc jobs with urgent client requirements present opportunities for higher margin work as well. As the group seeks further avenues of growth post IPO in Jan this year, see the potential for acquisitions ahead. At the same time, its proven track record and established relationships with clients lend confidence that it can weather downturns and be a beneficiary during up-cycles.