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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.
Seatrium share price
Source: SGX as of 20 May 2023

🔧 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.
Seatrium consensus share price
Source: SGX as of 20 May 2023

 

Disclaimer: The information provided on is meant purely for informational and investor education purposes, and should not be relied upon as financial or investment advice, or advice on corporate finance. No information is presented with the intention to induce any person to buy, sell, or hold a particular investment product or class of investment products.

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