Seatrium's orderbook soars to above S$20 billion
20 May 2023
Seatrium (formerly Sembcorp Marine) announced that its net orderbook has grown to above S$20 billion.
🕵️♂️ What happened?
- Seatrium (formerly Sembcorp Marine) announced that its net orderbook has grown to above S$20 billion.
- This is higher than Sembcorp Marine and Keppel Offshore and Marine's combined orderbook of S$17.8 billion in December 2022.
🔧 What are the drivers of Seatrium's share price?
- Seatrium has seen strong order momentum year-to-date. In May 2023, the company was awarded a contract worth more than S$500 million for two offshore wind farm substations. This follows a contract worth 6 billion euro won by a Seatrium consortium to supply high voltage direct current electrical transmission systems for three mega offshore wind farm projects.
- The contracts demonstrate the company’s transition towards green energy, with renewables and green solutions now comprising 39% of the company’s order book.
- Seatrium has a healthy balance sheet following the completion of its merger with Keppel Offshore and Marine. The company has a net debt/equity ratio of 0.18x as of March 2023, a decline from 0.26x in December 2022.
🧐 What to look out ahead for Seatrium?
- Seatrium is undergoing a strategic business review which is expected to be completed before the end of 2023. The review could unlock synergies and build a roadmap for sustainable growth.
- Seatrium is the largest stock on the reserve list of the benchmark Straits Times Index (STI) currently, and could be included into the index in future reviews.
🧮 What's the valuation of Seatrium?
- Seatrium is currently trading close to 1x P/B despite the strong order momentum.
- The consensus target price for Seatrium is $0.156. This is 23% above Seatrium's share price of S$0.127 as of 19 May 2023.
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