CGS-CIMB and DBS Group Research kept their ‘hold’ ratings for Sembcorp Marine (SembMarine) unchanged after its 1QFY2021 ended March business update guided a net loss for FY2021.

However, analysts from both brokerages upped their target prices for SembMarine. CGS-CIMB’s Lim Siew Khee raised her target price to 22.6 cents from 14.1 cents previously, based on 0.8 times P/B. Similarly, DBS’ Ho Pei Hwa raised her target price from 14 cents to 20 cents on a higher P/B of 0.7 times from 0.5 times previously.

Lim notes that SembMarine’s order book was up 6% y-o-y at $1.89 billion as of 1QFY2021. She estimates that the recent RWE Sofia Offshore Wind Farm contract for high voltage direct current (HVDC) electrical systems offshore substations to be worth some $500 million. “SembMarine could start recognising some revenue from the recent win from 2HFY2021,” she opines.

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