Guangdong COSCO Shipyard assisted semi-submersible drilling platform construction started Edrill-3

Views: 650 Date :2013 -9-23

Guangdong COSCO Shipyard Offshore platform supply vessels operating

Views: 135 Date :2013 -10-23

Sina Finance YORK October 10 afternoon, according to " The Wall Street Journal," the United States to loosen partisan stalemate Wednesday, conservative Republican lawmakers raise the U.S. debt ceiling on short-term welcomed the proposal, House Republican leaders are preparing to meet with President Barack Obama , which is from the first meeting since the government shut down.

According to the participants, Mr Republican members of the House Budget Committee Chairman Ryan (Paul Ryan) on Wednesday presented to the Conservative peers prolonged the debt ceiling plan for 4-6 weeks, and a wide range of cutting the deficit to set up a framework for negotiations, according to Ryan planning, negotiating larger spending cuts, the next time the debt ceiling extension longer.

Whether in the choppy waters of the North Sea, Latin America's deep trench near the mainland, or often by the Gulf of Mexico hurricanes, a global oil and gas drilling to provide the necessary offshore drilling platform competitions now kicked off.

Over the years, from the Asian city-state of Singapore 's two companies - Keppel Group (Keppel) and SembCorp Marine (Sembcorp Marine) - dominate the market for the supply of such large equipment.

In shallow waters for so-called jack-up drilling rig field, the two companies occupy 70% of the total global market share. Keppel and PEMEX (PEMEX) on Friday signed an agreement to build and operate in Mexico jackup drilling a production boat dock.

Keppel and Sembcorp or semi-submersible drilling platform, the main supplier of this platform is the use of deep-sea drilling.

But Singapore is now beginning to feel the competition first started the heat of competition from China and South Korea's emerging opponent. China and South Korea are working from the Gulf of Mexico, offshore Brazil and West Africa drilling boom slice, and has started independent production jack-up drilling rigs and other equipment.

In the three months ended September, Chinese shipyards got eight jackup drilling ship orders, and Singapore companies only got three orders - this is the first time in China on orders over competitors.

Research institutions Religare data provided so far this year, Chinese shipyards received orders from the jack-up rig has accounted for 45% of total global orders, while the amount calculated according to the contract, China has accounted for the amount of orders received global order 32% of the total amount.

South Korean shipyards are also struggling to open up the market, Daewoo Shipbuilding and Marine Engineering Company announced that the company received since 1983, the first jackup drilling ship orders.

? Religare analyst Vincent Fernando (Vincent Fernando) said: " There is evidence that, in the flagship product from the jack-up rig areas, Singapore 's shipyards face competition from Chinese and South Korean shipyards competition, this competition is becoming increasingly intense. "

He pointed out that China's shipbuilding enterprises Shanghai Waigaoqiao Shipbuilding Co., Ltd. (Shanghai Waigaoqiao) recently won the French oil company Total (Total) a three-year contract, will be a Total oilfield in the North Sea to provide services.

Competition may be two Singapore companies - Keppel Group and Sembcorp - great impact. Both companies are listed on the Singapore Stock Exchange company, to marine-related business as the main source of profits.

Macquarie (Macquarie) pointed out that in Brazil, Mexico and Africa's " Golden Triangle" Sea Development 1000 deep wells, approximately $ 650 billion of capital expenditures. The agency is expected, which will continue to promote this began in 2011 the construction boom of the drilling platform, is expected this boom will continue for 3-5 years.

Macquarie also noted that the jack-up drilling rig orders will continue to grow, as is currently being used in most of jack-up rigs are old or obsolete, built in the decade up to 1985 shipbuilding boom.

Analysts say the jack-up rig is Singapore's most serious challenges facing the field. Chinese shipyards have been providing cheap loans to the buyer, as well as favorable payment terms. For example, Chinese shipyards only requires the buyer to pay a 5% down payment, while Singapore shipyard usually require a 20% down payment.

But relative to competitors from China, Singapore shipyard still has some advantages.

Keppel Offshore & Marine Corporation (Keppel Offshore & Marine) COO Zhouyao Yuan (Chow Yew Yuen), said drillers exploration work has a strict timetable, so you must determine the time of delivery of drilling equipment and are willing to veteran shipbuilding Factory to pay a premium to ensure that meet their needs to buy drilling equipment.

In contrast, Chinese shipyards generous loans and favorable payment terms easily attracted speculators - this is a major feature of the drilling industry - these speculators will then drilling equipment " down" to other buyers.

Zhouyao Yuan said: " We can not offer the same favorable payment terms, so we have to focus on improving product reliability and to improve the design."

Analysts also believe that the financial strength of the weak Chinese shipyards will inevitably have been out of the market. An obvious example is headquartered in Singapore 's maritime services company SwissCo Holdings, recently canceled the shipbuilding enterprises from China Rongsheng Heavy Industries (Rongsheng) Purchase two jack-up drilling rig contract. Rongsheng Heavy Industries is currently operating difficulties.

The key point is that China has not Keppel shipyard and Sembcorp as experience in multinational operations. Keppel and Sembcorp years has been in overseas operations dock (such as Keppel coming up with Pemex in Mexico, co-constructed dock), which narrowed them with Brazil, the Caspian Sea (Caspian Sea) and other key markets end customers distance.

CIMB Bank (CIMB) analyst Lim Siew Khee said: " We believe that people are Chinese shipyards 'stole' Singapore companies drilling equipment orders fears overdone. "

Although the South Korean market for drilling rigs in Singapore, poses a great threat, but Zhou Yaoyuan that Keppel " does not intend" in the " low-end market" is used in the initial phase of oil exploration vessels to compete with South Korea.

But analysts said the Chinese shipyard to improve their product quality and reliability is just a matter of time. Fernando pointed out, Dalian Shipbuilding Industry Group (Dalian Shipyard) and Nantong COSCO Shipyard Group (Cosco Nantong) belong to " is not limited to the construction of low-end vessel" of the enterprise.

Zhouyao Yuan said that, in addition, last month in New York organized by Barclays (Barclays) organized an energy conference, he noted that the attitude of the participants offshore drilling business has changed. Some drillers began to discuss the Chinese shipyard orders possibilities.

When asked about the Singapore shipyard can also sit back and relax long time, Zhouyao Yuan said: " I think, in fact, they may have three years."

Yangzijiang Shipbuilding - Wary of a False Dawn

Written By Stock Fanatic on Thursday, October 3, 2013 |

Sector recovery not convincing. There recent surge in BDI has fuelled rising anticipation for a recovery in the shipping market, and expectations for a return in shipbuilding orders. 

We do not see a broadbased recovery for Chinese shipbuilders yet as 

(1) rise in BDI was led mainly by rate hikes for capesize vessels, 

(2) container freight rates remain weak, and 

(3) yard overcapacity issue lingers. 

We fear that YZJ?s recent rise in share price may meet with downward pressure when shipping market recovery story disappoints. Downgrade to Sell, SOTP-based TP at SGD0.98.

Shipbuilding prices not likely to rise significantly yet

The new wave of shipbuilding orders is expected to be driven by structural switch to fuel-efficient vessels rather than the need for new capacity. Korean shipbuilders hold the lead for such vessels while competitiveness for Japanese shipbuilders have re-emerged with the lower Yen. Therefore we do not see shipbuilding prices picking up significantly. In comparison to 2008 peak, average price is at least 30% lower currently. 

Thus, while there may be some short-term spike in new orders, we still see margin contraction and EPS decline for YZJ?s core shipbuilding business for FY13-15F as higher margin contracts are depleted from orderbook.

YZJ is a still a standout yard

We have no doubt that YZJ stands out among the Chinese shipyards. This view was reinforced after our recent visit to its JNYS and Xinfu yards in Jiangsu, PRC. We witnessed vessel launch of Chinese shipyards? first 10,000teu containership, which is being built by YZJ. This clearly demonstrates its superior expertise relative to many Chinese shipyards. It is building a total of 16 such units for Seaspan which includes an option for 9 more.

But lift in sector valuation level is fragile

We agree YZJ would be the best proxy to ride a shipbuilding recovery cycle, but we disagree that this is the turn. We think that the recent lift in valuation is fragile as it is not supported by future EPS growth with margin decline still in the cards. We argue that order win pickup is still not sufficient to drive EPS growth in the core shipbuilding business for FY13-15F as shipbuilding prices would remain capped. (Read Report)

Source : Maybank Kim Eng Research