Sembcorp Marine

Sembcorp Marine: OSK DMG notes that SMM is oversold on drillship and oil price jitters, and reckons that valuations are looking attractive and positive surprises may arise from the repair segment as well as from rebounding operating margins. With new orders clinched this year standing at $2.8b vs house forecast of $5b, OSK has lowered its forecast to $4b for FY14-16, given the weak outlook on deepwater drilling asset orders. Valuation-wise, SMM is now trading at 11x P/E for FY14, nearly 1 SD below its 10-year average. Estimated yields are now topping 4%, which may attract income-driven investors. House maintains BUY with lowered TP of $4.50 (from $5.00).