SMM

SMM: MS weighs in on investments made (announced last week). And guides that near-term upside limited. 1) Acquisition of SSP Offshore for US$21m. Contribution seems limited as its proprietary technology is not widely used by industry currently. In addition, the small acquisition will only make a small contribution 2) Investment in steel fabrication facility and construction of Phase 2 of Tuas Integrated Yard has commenced, expected to be completed 3Q15, and will have tonnage capacity more than 2x the existing the hull shop at Tanjong Kling and expected to double productivity. Construction of another 3 dry docks have also begun. MS has an Overweight view on SMM with TP of $4.60