Seatrium (SGX: STM): Capitalizing on Offshore Opportunities in Brazil’s Oil & Gas and Wind Sectors

Recommendation: BUY

• Target Price: S$2.31
• Date of Recommendation: September 9, 2024
• Broker Company: UOB Kay Hian

Investment Thesis:

Seatrium stands out as a key player in the offshore sector, with significant opportunities emerging in Brazil, particularly in the oil and gas, and wind sectors. Seatrium’s strong foothold in these industries positions it for future growth as it continues to execute large-scale projects.

Key factors driving this investment opportunity include:

• Strategic Focus on Brazil’s Offshore Sector: Seatrium’s exposure to Brazil’s booming offshore sector, particularly oil & gas, as well as offshore wind energy, provides a long-term growth driver. Brazil remains one of the largest markets for offshore oil exploration, and Seatrium is well-positioned to benefit from new contracts and infrastructure projects.
• Expansion into Offshore Wind: As global energy transitions toward renewables, Seatrium’s increasing focus on offshore wind energy will help diversify its portfolio and reduce reliance on traditional oil & gas projects.
• Order Book and Capacity: The company boasts a strong order book, ensuring a steady stream of work in the medium term, with the potential for more contracts as Brazil continues to explore offshore energy production.

Financial Performance:

Seatrium’s financials are set to improve due to the increasing demand for its services in Brazil and other key markets. The strong demand for oil and wind energy infrastructure provides a favorable environment for revenue growth.

Valuation and Catalysts:

The target price of S$2.31 reflects Seatrium’s robust pipeline of projects and its capacity to capitalize on the expanding Brazilian offshore market. Investors should view Seatrium as a long-term growth play, with significant upside potential driven by its strategic position in the energy transition space.

Thank you