Keppel Corp

Keppel Corp has secured two contracts worth a total of about $65m. The first contract was awarded by Seaways International to build an AHT vessel. When completed in 2Q16, this vessel will be the fifth AHT unit that Keppel has built for Seaways. The second contract was awarded by Nakilat-Keppel Offshore & Marine (N-KOM), a JV shipyard in Qatar between Nakilat and Keppel, to provide technical services for the construction of a liftboat. This is the first time that Keppel Singmarine will be providing technology solutions for a liftboat. The latest contracts come just days after Keppel Corp secured a vessel contract worth US$705m from Global LNG to convert a LNG carrier into a floating liquefaction vessel, and a US$100m contract to build one of the world’s largest land drilling rigs for a major operator. The recent order wins suggest that Keppel has been able to diversify and secure orders apart from its traditional jack-up and semi-sub rigs, which could alleviate some concerns of an order drought going forward. The latest contract brings the group’s orderbook to ~$12b, with deliveries extending into 2019. At the current price, Keppel Corp trades at 9.7x forward P/E versus its historical 10-year average of 12.4x. Overall, Maybank-KE rates Keppel Corp as a Hold, with TP $9.00, preferring to await further clarity on oil price outlook, before positioning for any entry. Technically, the house tips key support levels at $7.53 and key resistance levels at $8.53 and $9.63.