Rating SELL (as at 25 June 2021)
Last Close SGD 0.19
Fair Value SGD 0.09 (rights-adjusted)
To combine with Keppel O&M
• KEP and SMM entered into non-binding MOU with a view to combine Keppel O&M and Sembcorp Marine
• Terms of combination still being discussed; may take several months
• SMM proposes SGD1.5b rights issue

Investment thesis
Sembcorp Marine is one of the global leaders in rig building, offshore platforms and specialized shipbuilding and repairs. The group is pivoting to renewable energy solutions and recently won the first significant contract after a drought in 2020. Looking ahead, we expect news of more order wins but investors are advised to look beyond the headline numbers for Sembcorp Marine’s share in a consortium contract, as well as the margins behind it. Still, order wins will keep the yards utilised and burnish the group’s track record in the renewable space. Losses are still expected for the group going forward, based on its current orderbook.