Disposal of 9 Rigs a Positive to Sembcorp Marine’s Balance Sheet; Long-Term Outlook Unchanged
Despite the sale of nine jackup drilling rigs to Borr Drilling, we maintain our fair value estimate of SGD 1.24 for no-moat Sembcorp Marine. Although the disposal will increase Sembcorp Marine’s balance sheet strength and reduce risks of further write-downs, we think the shares remain overvalued presently, as the market has been optimistic on the recovery of the offshore and marine, or O&M, sector, which we think is unlikely in the near term.Sembcorp Marine announced that it will sell nine ...
Sembcorp Marine is a marine and offshore engineering group. Co. is engaged in the provision of management services and investment holding. Co. provides a portfolio encompassing a range of integrated solutions from ship repair, shipbuilding, ship conversion, rig repair and rig building to offshore engineering and construction. Co. has two reportable segments: ship and rig repair, building and conversion; and ship chartering. In addition, Co.'s other operations include bulk trading in marine engineering related products; provision of harbor tug services to port users; collection and treatment of used copper slag; and the processing and distribution of copper slag for blast cleaning purposes.
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Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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