KepCorp

KepCorp: Bumped up its order book to US$1.8b (S$2.23b) to-date, with a fresh jack-up rig win, as Falcon Grp awarded Keppel Fels an order for a US$226m KFELS B Class jack-up. Falcon Energy entered the offshore oil drilling business when they ordered two jackup rigs from China in 2011, while Falcon Energy has instead now chosen Kepcorp for its KFELS Super B Class design for their new high specification jackup rig, which will be built in SG. CS highlight its positive view on the jackup rig, and expect it to surprise positively on the upside this yr, since 2013 Kepcorp has secured orders for 7 Jack ups. While latest order wins demonstrate the competitive strength of Singapore yards against emerging Chinese yards for high-spec units. CIMB maintains O/P with $13.30 TP. House note that Proven design and track record could be the reasons Falcon Energy is returning to home ground and ordering a jack-up rig from Keppel instead of adding to the two being built by China’s CMHI.

Keppel’s jack-up rig order from new customer Falcon Energy, appears to be the highest price paid so far for a KFELS B Class jack-up at US$226 million, UOB KayHian says. With Keppel’s year-to-date new contracts already at $2.15 billion, the company could exceed UOB-KH’s 2013 target for $5 billion, it says. It rates the stock at Buy with a $12.55 target. The stock is down 1.0% at $11.28.