SembCorp Marine (S51.SG) is +1.4% at $5.21 in healthy volume, against the STI +0.1%, after the company says it secured a newbuild contract for a dynamically positioned research vessel and three upgrading contracts, totalling $215 million.

While analysts’ bullish views on demand for high spec jackup rigs have cheered investors as SMM and Keppel (BN4.SG) are key beneficiaries (60% market share in new jackup orders in 2010), these orders are likely generating interest as they highlight SMM’s strong capabilities in the highly specialized niche and customized vessel sector. 

 

OCBC, which has a Buy rating and $5.70 fair value estimate, says “this is SMM’s first announcement regarding contract wins for this year, and we are incorporating a $4 billion new order win estimate (excluding Petrobras tender) for FY11 versus 2010’s total order intake of about $3.2 billion...SMM is likely to meet our new order assumptions.” 

 

Last week’s high at $5.26 may cap the stock near term, before the multi-year high of $5.47. Keppel (BN4.SG) is +0.5% at $11.52 and Semborp Industries (U96.SG) is +0.8% at $5.08.