Report Summary

• Maybank initiates coverage on Seatrium with a BUY rating and a target price of SGD3.10, driven by expected order wins and margin improvements, projecting a 27% earnings CAGR from FY25–28.
• Seatrium is pursuing a >SGD32b order pipeline, with annual order wins forecasted at SGD10–11b for 2026–28, supported by strong offshore oil & gas, FPSO, and offshore wind demand, and a shift towards higher-margin, repeatable projects.
• Gross margins are rising, with legacy low-margin work nearly cleared; series-build projects now comprise 95% of the backlog, and further margin upside is expected from cost controls, asset divestments, and improved project mix.
• Balance sheet strength has improved, net leverage reduced to 0.8x, and free cash flow generation is robust, supporting dividend growth and share buybacks.
• Seatrium’s order wins correlate strongly with oil prices, and its diversified global footprint offers resilience amid geopolitical tensions and energy diversification trends.
• Risks include legacy legal issues, project delays, cost inflation, and FX volatility, but recent settlements and operational improvements have reduced tail risks.
• Seatrium is well-positioned for medium-term growth as a premier offshore energy solutions provider, with dual engines in traditional hydrocarbons and energy transition infrastructure.