COSCO: Could see positive interests, after announcing that Seadrill has exercised an option to construct a new tender drilling rig T-17 valued at US$66m. Seadrill has now exercised one of the options awarded by Cosco. Rig is scheduled for delivery in 1Q13 and contract is not expected to have a material impact on grp’s EPS and NTA for 1Q11…..
Contract wins brings YTD orders secured to US$2.76b, and grp’s orderbook to approximately US$7.3b vs FY10 Rev of US$3.07b, under pinning earnings till 2013/14. Citi has Buy Call on grp with $3.00 TP. Note that fundamental recovery is not yet fully priced in and raise estimates by 10-11% over 2011/12E pegged to 21x mid FY12E P/E. Add that consensus underestimates the pace Cosco is transitioning into a credible O&M play. CIMB however remains neutral on grp with $2.38 TP.
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