CGS-CIMB maintains ' add' call on Sembcorp Marine following news of probe in Brazil
The Edge SingaporeMon, Mar 27, 2023 &bull 12:00 PM GMT+08 &bull 2 hours ago &bull 3 min read
Lim Siew Khee of CGS-CIMB has maintained her " add" call and 12 cents target price on Sembcorp Marine, following news that Brazilian authorities have commenced a " preliminary administrative liability proceeding" against the company&rsquo s local unit, Estaleiro Jurong Aracruz Ltda (EJA), for alleged &ldquo irregularities&rdquo .
According to Sembcorp Marine, the notice gave no further details and SMM cannot assess the matter or its impact, if any. EJA is fully cooperating with the authorities.
&ldquo We think the resurgence of negative newsflow on any form of investigation by Brazilian authorities could weigh down Sembcorp Marine&rsquo s share price in the near term until further clarity is provided,&rdquo writes Lim in her March 24 note.
Back in 2012, Sembcorp Marine won seven contracts from Sete Brasil worth some US$5.6 billion.
The Brazilian agent connected to the contracts were charged and jailed in 2020 and EJA&rsquo s previous president was terminated in 2015 and has been under investigation under his personal capacity since 2019.
In 2015, Sembcorp Marine had already provided for $329 million in relation to the Sete Brasil contracts, taking into consideration unpaid invoices, construction progress, and payables to suppliers and vendors, says Lim.
&ldquo We are unsure if there was any provision for litigation/investigation/ fines. Sete Brasil filed for bankruptcy in 2016,&rdquo she adds.
In 2020, Sembcorp Marine reached a settlement with Sete Brasil for the seven drillships allowing the yard to keep all works on the uncompleted five units and sell the two that were largely completed.
Separately in Dec 2017, Keppel Corp agreed to pay a US$422.2 million fine as part of the global resolution with US, Brazil and Singapore authorities in relation to corrupt payments made by Keppel&rsquo s former agent in Brazil, Zwi Skornicki.
See also: RHB maintains ' buy' on Raffles Medical Group following strong revenue and China' s reopening
Both Keppel, via its former offshore and marine unit, and Sembcorp Marine have significant business in Brazil.
Lim estimates that orders related to Petrobras, the national oil company of Brazil, makes up 67% of the combined order book of Sembcorp Marine and Keppel&rsquo s offshore and marine unit.
Keppel had secured orders for two units of floating, production, storage and offloading (FPSO) vessels, P-80 (worth US$2.9 billion) and P-83 (US$2.8 billion).
Sembcorp Marine, meanwhile, has been tasked to build P-82, worth US$3.05 billion.
Lim says her &ldquo add&rdquo call is premised on how the new management team at the combined entity, trading under Sembcorp Marine, can execute the orders on hand, as well as the pace of turnaround.
Sembcorp Marine shares, as at noon on March 27, traded at 11 cents, up 2.88%.
the 18B orders is NOT static , Q1 dont have any orders ? and w oil rising again ( China improve demand) I doubt SM will have nothing.
Once another project win or any restructuring plan advise could be a catalyst for SM .....may not be too long
Dyodd
CheeryVGoh ( Date: 27-Mar-2023 13:39) Posted:
Short to Medium term think quite difficult . See if Tan Kuku could do the job or not.
Eagle88 ( Date: 27-Mar-2023 13:19) Posted:
Tan kuku will wait for no man... |
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Possible, when company announces it's strategic restructuring plan to public.
CheeryVGoh ( Date: 27-Mar-2023 13:11) Posted:
UOB KH :
Maintain BUY with S$0.156 target price. With the merger with KOM completed, the focus on the enlarged SMM group will be to garner new orders in 2023 and add to its S$18b orderbook. Our target book-value multiple for SMM of 1.2x reflects our confidence that it will garner such orders, thus leading to positive share price performance. |
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Short to Medium term think quite difficult . See if Tan Kuku could do the job or not.
Eagle88 ( Date: 27-Mar-2023 13:19) Posted:
Tan kuku will wait for no man...
CheeryVGoh ( Date: 27-Mar-2023 13:11) Posted:
UOB KH :
Maintain BUY with S$0.156 target price. With the merger with KOM completed, the focus on the enlarged SMM group will be to garner new orders in 2023 and add to its S$18b orderbook. Our target book-value multiple for SMM of 1.2x reflects our confidence that it will garner such orders, thus leading to positive share price performance. |
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Say is liddat lah but as Blaise Pascal so astutely observed ...
All men's miseries derive from not being able to sit in a quiet room alone.
Eagle88 ( Date: 27-Mar-2023 13:08) Posted:
Any one with tons of CPF still can pick up cheap and keep for another 1 year or more and you will see wonders !!!
Eagle88 ( Date: 27-Mar-2023 09:40) Posted:
| SM is a blue chip with penny price !!! Any price below 110 is still very2 reasonable. Wait long2, you are going to miss the boat !!! |
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You push, I push, every one push2, push it somemore!!! LOL
eugesun ( Date: 27-Mar-2023 13:18) Posted:
Good report...bright future....don't miss the boat...
CheeryVGoh ( Date: 27-Mar-2023 13:11) Posted:
UOB KH :
Maintain BUY with S$0.156 target price. With the merger with KOM completed, the focus on the enlarged SMM group will be to garner new orders in 2023 and add to its S$18b orderbook. Our target book-value multiple for SMM of 1.2x reflects our confidence that it will garner such orders, thus leading to positive share price performance. |
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Tan kuku will wait for no man...
CheeryVGoh ( Date: 27-Mar-2023 13:11) Posted:
UOB KH :
Maintain BUY with S$0.156 target price. With the merger with KOM completed, the focus on the enlarged SMM group will be to garner new orders in 2023 and add to its S$18b orderbook. Our target book-value multiple for SMM of 1.2x reflects our confidence that it will garner such orders, thus leading to positive share price performance. |
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Good report...bright future....don't miss the boat...
CheeryVGoh ( Date: 27-Mar-2023 13:11) Posted:
UOB KH :
Maintain BUY with S$0.156 target price. With the merger with KOM completed, the focus on the enlarged SMM group will be to garner new orders in 2023 and add to its S$18b orderbook. Our target book-value multiple for SMM of 1.2x reflects our confidence that it will garner such orders, thus leading to positive share price performance. |
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Any one with tons of CPF still can pick up cheap and keep for another 1 year or more and you will see wonders !!!
Eagle88 ( Date: 27-Mar-2023 09:40) Posted:
| SM is a blue chip with penny price !!! Any price below 110 is still very2 reasonable. Wait long2, you are going to miss the boat !!! |
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SM is a blue chip with penny price !!! Any price below 110 is still very2 reasonable. Wait long2, you are going to miss the boat !!!
Shout for $3 and even if it does not hit $3, it will hit 30 cents !!! LOL
limkt009 ( Date: 27-Mar-2023 12:39) Posted:
It is so magical
naoshingo ( Date: 27-Mar-2023 12:35) Posted:
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Oh yes, stock is about future...must have faith..
30 cents...lol...
limkt009 ( Date: 27-Mar-2023 12:39) Posted:
It is so magical
naoshingo ( Date: 27-Mar-2023 12:35) Posted:
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3 cents, 3 cents, 3 cents
eugesun ( Date: 27-Mar-2023 12:11) Posted:
Keep shouting 30 cents, it will come sooner...lol..
Eagle88 ( Date: 27-Mar-2023 11:57) Posted:
| Everything is possible. BB calls the shot and never go against the market.
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Keep shouting 30 cents, it will come sooner...lol..
Eagle88 ( Date: 27-Mar-2023 11:57) Posted:
Everything is possible. BB calls the shot and never go against the market.
Stocky901 ( Date: 27-Mar-2023 11:45) Posted:
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Everything is possible. BB calls the shot and never go against the market.
Stocky901 ( Date: 27-Mar-2023 11:45) Posted:
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