Kim Heng

Kim Heng: Religare initiated on the stock, highlighting that it represents a unique Singapore investment exposure to the record number of rigs being built globally. Kim Heng enjoys patronage from Transocean, Seadrill, and Noble, and the house highlights benefits are not just from new rig construction, but also from the entire life cycle of the offshore rigs. As such, the house reckons Kim Heng’s growth is underpinned by the record number of rigs to be delivered over the next few years. Kim Heng is asset light and highly cash generative. Clients pay for the reliability rather than fixed assets, allowing Kim Heng to earn substantially higher returns on capital than most listed Singapore peers. Religare initiates with Buy and TP of $0.34, citing that investors yet do not fully appreciate the investment thesis of the stock.