Sembcorp Marine's surge seen to continue until 2012

Analysts have raised net profit estimates by 2.8% to S$785m in FY2012E as crude oil prices are likely to bring in more orders for the shipping company.

Forecast for FY2010E and FY2011E have also been increased by 23.3% and 7.5% to S$789m and S$741m, respectively.

In a statement. Phillip Securities Research said improvements in productivity and an influx of inquiries regarding jack-up and semi-submersible rigs are seen to lift Sembcorp Marine’s operating margins. The shipping company is also confident on clinching new orders after the lifting of the ban on deepwater drilling in the Gulf of Mexico.

The research firm has also maintained its “buy” recommendation on Sembcorp stocks given the likelihood that the company will receive more contracts for jack-up rigs. “We [are maintaining] our buy recommendation, [and we have raised] its fair value from S$4.73 to S$5.46 because we rollover our earnings estimates from FY2010E to FY2011E and we have increased the fair value of Cosco from S$1.65 to S$2.32,” it said.

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