Continue reading this on our app for a better experience

Open in App
Floating Button
Home Capital Broker's Calls

Don’t expect 'eye-catching' 3Q business updates from Keppel, Sembmarine: UOBKH

Jeffrey Tan
Jeffrey Tan • 2 min read
Don’t expect 'eye-catching' 3Q business updates from Keppel, Sembmarine: UOBKH
The O&M sector is likely to continue as oil demand could stay weak in the face of more Covid-19 infections.
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Amid the current results season, UOB KayHian is not expecting anything “eye-catching” from Keppel Corp and Sembcorp Marine (Sembmarine).

See also: Keppel Corp's wholly-owned subsidiary divests interest in Thailand's Business Online Public Company for $36 mil

This comes as the prolonged downturn in the offshore and marine (O&M) sector is likely to continue as oil demand could stay weak in the face of more Covid-19 infections.

UOBKH says it expects Keppel to register revenue of between $1.4 billion to $1.5 billion in its 3Q20 business update.

The company’s share price performance in the next few months, it says, will centre around the fate of its O&M business unit, which is currently under a strategic review.

See also: To secure Keppel's future, its O&M unit needs to go — with or without Temasek

See also: Test debug host entity

But “commentary regarding its China property business will be important to gauge the sequential recovery post-Covid-19”, UOBKH analyst Adrian Loh writes in a note dated Oct 27.

While Sembmarine have yet to commit to releasing any business updates, UOBKH says it expects the company to retain a “bearish tone” given the lack of new order wins this year.

However, its former parent company Sembcorp Industries could do better, though it has also yet to commit to releasing any business updates.

See also: Maybank downgrades ComfortDelGro in contrarian call over Addison Lee acquisition worries

The brokerage expects the Sembcorp to announce a “better sequential guidance” as some of the economies that the company has a presence in are on the road to recovery post-Covid-19.

UOBKH has maintained its “buy” rating for Keppel with an unchanged target price of $6.30.

It has also kept its “buy” recommendation for Sembcorp with an unchanged target price of $1.66.

The brokerage, however, has retained its “sell” call for Sembmarine with an unchanged target price of 15.4 cents.

Overall, UOBKH has reiterated its “market weight” rating for the O&M sector.

As at 11.32 am, Keppel was down 4 cents or 0.9% at $4.30 with 1.7 million shares changed hands.

Sembcorp was down 2 cents or 1.2% at $1.59 with trade volume of 6 million shares.

Sembmarine was down 0.2 cent or 1.6% at 12.6 cents with 25.7 million shares changed hands.

Highlights

Re test Testing QA Spotlight
1000th issue

Re test Testing QA Spotlight

×
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2024 The Edge Publishing Pte Ltd. All rights reserved.