Sembcorp Marine

Sembcorp Marine | Buy

March 28 close: $2.18

Target price: $2.90

Broker: DBS Group Research, March 28

Sembcorp Marine has announced that it has secured the engineering, procurement and construction contract for the hull and living quarters for a new build floating production, storage and offloading vessel from TechnipFMC, which we highlighted earlier this month. The first major contract win this year contributes approximately 15 per cent of our full-year expectation of $3 billion. We believe the order flow could be stronger than expected, given the robust pipeline.

Maintain "buy" and target price.

The share's pullback from the recent high of $2.80 has removed the merger and acquisition premium ascribed, thus providing a better entry point to position for a sector recovery.

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