Seatrium Limited: Strong Market Position and Growth Potential Drive Buy Rating

DBS analyst Pei Hwa Ho reiterated a Buy rating on Seatrium Limited (SMBMF – Research Report) today and set a price target of S$3.00.

Pei Hwa Ho has given his Buy rating due to a combination of factors that highlight Seatrium Limited’s strong market position and growth potential. The company, formed from the merger of Keppel Offshore & Marine and Sembcorp Marine, is a global leader in offshore engineering and is well-positioned to capitalize on the growing demand for clean energy solutions. The integration post-merger has been successful, with significant cost savings anticipated by 2025, and a robust order book exceeding SGD23 billion supports a positive revenue growth outlook.
Operational improvements and strategic order wins are expected to be key catalysts for re-rating the stock. Seatrium’s management has set ambitious targets for revenue growth and profitability, aiming for a five-year CAGR of 7-10% and an EBITDA of over SGD1 billion by 2028. The company’s focus on new energy capabilities, such as Carbon Capture and Storage, further enhances its long-term growth prospects. Despite potential risks like oil price fluctuations and integration challenges, the strong order momentum and effective management execution underpin the Buy recommendation, with a target price of SGD3.00.

According to TipRanks, Hwa Ho is a 4-star analyst with an average return of 14.9% and a 61.22% success rate. Hwa Ho covers the Industrials sector, focusing on stocks such as Yangzijiang Shipbuilding (Holdings), Seatrium Limited, and Keppel Corporation Limited.