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Half a year ago, Swiber has been a much touted stock as its order books swelled to US$1b which is an all time record. Nevertheless, its share price failed to impress with a 2.0% year to date (“YTD”) loss vis-à-vis STI’s 8.5% gain. Notwithstanding the underperformance, Swiber looks interesting due to the reasons below.
Excellent macro conditions
According to the International Energy Agency, it postulated that demand for oil will rise 260,000 barrels more than its previous forecast to 88.8 million barrels a day next year. Furthermore, based on Infield Systems’ latest offshore fixed platform data, there is likely to be a ramp-up in the number of shallow-water fixed platform installations in 2011.
Strong order books – significant revenue contributions in the next two years
Swiber’s order books as of Nov 10 amounted to US$800m. These orders increased the visibility of Swiber’s earnings in the next two years as the bulk of their contributions will be recognized in the next two years.
More contracts in the pipeline
According to UOB Kay Hian, Swiber is bidding or is pending for submission for a number of contracts as depicted in Table 1. With a historical success rate of 10-20% (which should gradually improve as their relationships deepen with their customers, coupled with ownership of more offshore vessels and construction vessels than 2005-2008), Swiber should see some healthy contracts flow in the next few years.
Swiber Is Awarded For Employee Health Programs
BackDec 20, 2010
As of Nov 2010, order book stand ...
slimerlth 发表于 23-12-2010 03:28 PM
US$800 million ? I heard this more than 3 months liao still US$800 million.
Sembmarine and Keppel got so many new projects Swiber still struggling.
Last time I was cut loss at 1.01 not planning to buy back now.