Swiber has traded below the 0.75 resistance for slightly more than a month and today we have seen it test the 0.75 – 0.755 resistance again. High as of today is 0.76 currently. Could be a potential stock for more upside if the 0.76 level get lifted within the next few days. If that happens, near term target to 0.800 and recent high of 0.81.
Stop loss 0.735 for short term trades
OCBC – 10 JUNE 2013
Swiber Holdings: More work coming up?
Summary: According to Upstream, PEMEX is preparing to begin a bid process that aims to offer a contract to deliver and install four Ayatsil platforms. The group is in the pre-qualification phase for the contract, and heavy-lift contractors such as Saipem, Heerema and Swiber Holdings are said to be interested. The entire package is estimated to be worth ~US$300m. Swiber recently saw its share price run up about 23% from 14 May (pre-1Q13 results announcement) to its close on Friday, after we upgraded our rating from Hold to Buy. However we still see an upside potential of about 12% over a one-year time frame. Maintain BUY with S$0.86 fair value estimate.
OCBC – 31 MAY 2013
EXPANDING INTO DEEPWATER
- Plans to buy US$500m vessel?
- Similar to Lewek Constellation
- Monitoring cash flows
According to Upstream, Swiber Holdings is preparing to invest in its first large deep-water offshore construction vessel for its fleet. In particular, the company is understood to have expressed its intention to purchase a vessel similar to Ezra’s Lewek Constellation. The capex of US$400-500m is huge, but considering that the unit is expected to take up to three years to build and the group has not announced any additional substantial capex plans, this may be a manageable purchase. Meanwhile, we would continue to monitor the group’s cashflow from operations. Pending an official statement from the company, we do not see this as a surprise, as Swiber has expressed its intentions to expand its operations into deeper waters. Maintain BUY with S$0.86 fair value estimate.
CIMB – 30 MAY 2013
