These are Keppel's 3 new contracts that raked in S$420m

It would squeeze in 4% to the order book.

According to Phillip Securities, Keppel O&M has recently secured three new contracts worth a total of S$420m.

Here's more from Phillip Securities:

The contracts include the (1) building of a high-specification deepwater pipelay (S-Lay) vessel for Hydro Marine Services, a subsidiary of McDermott International (scheduled to begin in 1Q13 and to complete in 2.5 years);

(2) building of a catamaran air dive support vessel for Australia-based Bhagwan Marine, an offshore oil and gas services provider (scheduled for completion in 1Q14); and

(3) modifying and upgrading of a floating production storage and offloading (FPSO) facility for EMAS Offshore Construction and Production (scheduled for completion in 2Q13).

These new contract wins are encouraging and positive. The S$420m contracts would add 4% to order book, bringing the total to S$9.9b for 2012, just S$0.1b less than its 2011 record of S$10b. We set our order target for 2013 at S$5.9b.

We believe the long-term O&M prospects remain strong as there are still robust demand for premium jack-ups, ultra-deepwater rigs and other offshore related assets.

Trading at FY13E PER of 12.6x with ROE of 18.2% and a dividend yield of 4.0%, Keppel is attractively valued, in our view. Balance sheet is strong.

We believe Keppel is well positioned with its commitment to improve productivity and competencies of its regional satellite yards to meet heavier workload requirements.

Our SOTP-based target price is S$12.38. Key risks include significant downtrend in oil prices, greater-than-expected US$ depreciation against S$, and execution of contracts.

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