Broker Name: Maybank Research Pte Ltd
Date of Report: March 27, 2026
Excerpt from Maybank Research Pte Ltd report.
Report Summary
- Maybank initiates coverage on Seatrium with a BUY rating and SGD3.10 target price, citing strong structural demand for offshore energy and renewables, improving gross margins (from 3% in FY24 to 7% in FY25, targeting mid-teens), and a robust order pipeline of over SGD32 billion.
- Order wins are expected to accelerate to SGD10–11 billion per annum in 2026–28 (vs. ~SGD4 billion in 2025), driven by demand for FPSOs, offshore wind, and conversions, with a heavy Americas and Europe focus.
- Margin recovery is underpinned by a cleaner order book (95% series-build projects), cost-saving initiatives, and divestments, leading to a projected 27% earnings CAGR for FY25–28 and improving free cash flow, balance sheet, and shareholder returns.
- Seatrium benefits from global energy security trends, energy transition investments, and a strong correlation of order wins to oil prices; risks include legacy project issues, cost overruns, oil price volatility, and capex timing due to geopolitical factors.
- Valuation is based on DCF (8.4% WACC, 1% terminal growth), with Seatrium trading at a discount to global peers despite improving fundamentals and significant upside potential as margins and order inflows recover.
- Seatrium has made significant ESG progress, with 34% of its order book in renewables, a 30% reduction in Scope 1 and 2 emissions, and robust governance and workplace safety initiatives.
Above is an excerpt from a report by Maybank Research Pte Ltd. Clients of Maybank Research Pte Ltd can be the first to access the full report from the Maybank Research website : https://www.maybank-keresearch.com
