Keppel is up 0.6% at $10.93, slightly outperforming the STI’s 0.2% rise after landing a US$420 million ($513 million) contract from Pemex for two jack-up rigs. Maybank-Kim Eng estimates year-to-date wins are now $10.7 billion, in line with its $11.0 billion full-year forecast.
The win follows rival SembMarine’s contract win last week for two jackup units from Oro Negro, which will also be working for Pemex, the house says in a note, adding Oro Negro has said Pemex would need about 60 jackup rigs over the next five years.
“We see the possibility of both Keppel and Sembcorp Marine securing more Mexican offshore related contracts,” it says, noting Keppel mentioned getting more enquiries from Mexico.
Maybank-KE notes the pricing is above 2011’s US$180 million-US$193 million levels, supporting its view established rigbuilders still hold some pricing power despite competition from Korean and Chinese yards. It keeps a Buy call with $12.80 target. With the stock tapping its highest since Oct. 29, further gains may be limited; orderbook quotes suggest it won’t retest its $10.96 intraday high.
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