Seatrium - DBS Research 2023-09-21: All Stars Are Aligned

Seatrium - All Stars Are Aligned

Seatrium (SGX:S51) | SGinvestors.ioSeatrium (SGX:S51)
  • We hosted Seatrium for investor meetings in Hong Kong and came away feeling more convicted and excited about the turnaround of the shipyard group and the upcycle of the Offshore & Marine industry.
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  • Reiterate BUY; target price for Seatrium unchanged at S$0.18, based on 1.5x FY24F P/B, in line with peers' median.

Bright outlook for order wins.

  • Seatrium (SGX:S51) has secured strong order wins of S$4.3bn in 1H2023, resulting in net orderbook of ~S$20bn (including S$0.7bn of repair & upgrade projects). New wins comprise largely of contracts for two High Voltage Direct Current (HVDC) electrical transmission systems for TenneT, a leading European grid operator, estimated at S$3.3bn and Empire offshore wind farm substation worth ~S$500m.

Enquiry level and order pipeline remain robust.

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  • The third TenneT HVDC contract, which we estimate is worth S$1.6-1.8bn, stands a good chance to become effective in 2H. In addition, there is more to come as TenneT, a reputable utility company backed by the Dutch government, has ambitious plans to build 60GW of offshore wind capacities by 2030 (28GW awarded thus far) and 300GW by 2050.
  • Seatrium has emerged as a front-runner for Petrobras’ P84 & P85 FPSOs, valued at ~S$4bn each, for the Atapu and Sépia fields, which are the sixth and fifth largest in Brazil. The other bidder is China Offshore Oil Engineering Corporation (COOEC). Seatrium is widely expected to win at least one FPSO order.
  • Brazil has accounted for one-third of FPSO awards since 2017. Seatrium has a strong niche in Brazil, being the only shipyard with a track record there, to fulfil the 20-25% local content requirement.

Drilling rig market making a comeback.

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Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Pei Hwa HO DBS Group Research | 2023-09-21

Read also DBS's most recent report:
2023-11-08 Seatrium - Charting A Growth Course; 3Q Business Update Alleviates Concerns.

Price targets by 2 other brokers at Seatrium Target Prices.

Listing of research reports at Seatrium Analyst Reports.

Relevant links:
Seatrium Share Price History,
Seatrium Announcements,
Seatrium Dividends & Corporate Actions,
Seatrium News Articles


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