Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-Macquarie upgrades Keppel Corp to outperform

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STOCKS NEWS SINGAPORE-Macquarie upgrades Keppel Corp to outperform Jun 7th 2012, 03:26 Wed Jun 6, 2012 11:26pm EDT Macquarie Research raised its rating on Keppel Corp , the world's largest rig-builder, to outperform from neutral, citing cheap valuations and a strong order pipeline. Shares in Keppel and rival Sembcorp Marine Ltd have underperformed the market over the past two months on concerns of a weak outlook as oil prices weaken. Macquarie said both Sembcorp and Keppel are now trading at 10 to 11 times one year forward price to earnings and at large discounts of about 20 percent to their five-year mean multiples on price to book. It said firms ordering rigs in the current industry upturn had better credentials allowing them access to funding despite the credit squeeze. Macquarie said deepwater projects can remain profitable as long as Brent crude oil stays above $75 a barrel. Keppel shares are still up 7 percent so far this year, while Sembcorp Marine has risen more than 14 percent versus a 4.5 percent rise in the Singapore's benchmark index. (Reporting by Harry Suhartono in Singapore; harry.suhartono@thomsonreuters.com) --------------------------------------------------------- 10:28 STOCKS NEWS SINGAPORE - UOB raises Ezion target to S$1.42 UOB Kay Hian raised its price target on Ezion Holdings to S$1.42 from S$1.34 after it said the offshore services provider won a third service rig contract from Mexico's Pemex. Ezion shares were up 0.65 percent at S$0.780 at 0145 GMT, the FT ST Small Cap Index edged up 0.3 percent. The stock has risen 19 percent so far this year, outperforming a 6 percent gain in the index. The charter contract is for four years with total revenue at $86.3 million or $21.6 million per year, and UOB estimates the project to yield a net profit of $7 million, adding 7 percent to its 2013 and 2014 earnings forecast. The project also has a "very high" return on equity (ROE) of 42 percent, well above Ezion's minimum project ROE requirement of 30 percent, said UOB and kept its 'buy' rating on Ezion. The broker expects Ezion's share price to benefit from a ramp-up in earnings as more liftboats and service rigs come onstream and demand is seen strong. For a related story, click link.reuters.com/fuj68s 0945 (0145 GMT) (Reporting by Eveline Danubrata in Singapore; eveline.danubrata@thomsonreuters.com) Link this Share this Digg this Email Reprints

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