Here's a glimpse of Singapore rig builders' battle plan for 2014

Focus on margins, says analyst.

According to OCBC Investment Research, the local rigbuilders are expected to continue securing orders at a pace that will at least match this year’s, while the offshore support vessel sub-sector should also see continued recovery as the market situation gradually tilts in favour of vessel owners – the Indonesian and Malaysian OSV sectors are especially looking relatively promising.

Meanwhile, subsea tendering activity remains firm.

Here's more:

Sembcorp Marine

Focus on margins, order intake, drillships and Tuas yard
Moving into 2014, we expect the market to focus on operating margins, order intake, the construction of SMM’s drillships and operation of the new Tuas yard.

As drillship orders make up slightly less than SMM’s net order book as at Nov 2013, the market is likely to pay close attention on the construction of SMM’s first drillship.

We saw a significant increase in ship repair revenues in 3Q13 though the new Tuas yard started only in Aug 2013. As operations ramp up, we believe ship repair growth will continue and expect about S$900m of repair revenue in FY14 vs S$650-700m in FY13F.

Nam Cheong Limited

Vessel sales to gain further traction in 2014
Nam Cheong reported a stellar 71.1% and 54.9% surge in its 9M13 revenue and PATMI to MYR851.3m and MYR135.2m, respectively, underpinned by contribution from the 20 vessels it has sold YTD for an aggregate amount of US$431.6m.

Its net order book stood at MYR1.4b as at end Sep 2013. For its 2014 shipbuilding programme, Nam Cheong has already managed to sell 16 of the 28 vessels which are under construction.

Given the uptick in the OSV market and the positive attributes of Nam Cheong as highlighted earlier, we expect it to maintain its track record of selling all its build-to-stock vessels prior to their delivery.

Keppel Corporation

Near Market, Near Customer strategy to position it well
We have always believed that KEP’s “Near Market, Near Customer” strategy will position it well in terms of new orders, especially in a time when local content requirement is increasingly favoured by end customers.

As such, we are positive on KEP’s recent announcement that it will jointly develop, own and operate a yard facility in Mexico.

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