5E2 Offshore Marine Sector Poised for Growth in 2025: Trump’s ‘Drill Baby Drill’ Mantra Boosts Sentiment:
Key Highlights
Seatrium holds a strong competitive position in the global offshore marine sector and is a key beneficiary of the positive dynamics expected in 2025.
The company is actively building eight out of Petrobras’ eleven Floating Production Storage and Offloading units (FPSOs) set to be deployed offshore Brazil between 2H24 and 2028.
Petrobras plans for an additional 7-11 FPSOs to come online post-2029, potentially worth \$20 billion to \$30 billion, with contracts likely to be awarded within the next 12-24 months.
Seatrium expects limited new rig supply over the next 2-3 years, a trend that should benefit Keppel’s efforts to sell its 13 legacy rigs.
Financial Metrics
The stock has a target price of S\$2.80, implying a 25.6% upside from its current price of S\$2.23. For 2024, the company’s revenue is forecasted at S\$8.343 billion, with a projected profit of S\$105 million. Notably, Seatrium’s P/B multiple of 1.4x is 1SD above its five-year average, reflecting its strong global position.
Recommendation
UOB Kay Hian recommends a BUY rating for Seatrium, emphasizing its exposure to strong offshore marine dynamics, rising vessel demand, and opportunities in renewables. Thank you