Core Viewpoint - Despite facing significant challenges, including contract terminations, OCBC Investment Research maintains a "buy" rating for Seatrium Limited with a target price of SGD 2.76 [1][2] Group 1: Contract Termination and Challenges - Seatrium recently received a contract termination notice from Maersk Offshore Wind regarding the "Sturgeon" wind turbine installation vessel, valued at approximately USD 475 million (SGD 610 million), with 98.9% of the project completed and originally scheduled for delivery in January 2026 [1] - The company's net order value decreased from SGD 18.6 billion in the first half of 2025 to SGD 16.6 billion, primarily due to a slowdown in securing new contracts [2] - Seatrium also received an arbitration notice from Keppel seeking SGD 68.4 million in compensation related to the "Operation Car Wash" corruption investigation in Brazil [2] Group 2: Long-term Outlook and Operational Performance - OCBC has incorporated potential provisions and expectations of slowed order growth into their analysis while maintaining the "buy" rating and fair value estimate of SGD 2.76 [2] - The long-term development trajectory of Seatrium, particularly its FY2028 targets (including an EBITDA of at least SGD 1 billion and a return on equity of no less than 8%), remains largely unchanged [2] - In the third quarter of 2025, Seatrium demonstrated confidence in operational performance, successfully delivering two projects and expecting three more by year-end, while completing maintenance and upgrades on 47 vessels [2] - The company has raised over SGD 140 million through the divestment of non-core assets, including a surplus shipyard in the U.S. [2]

Group 1 - Shanghai Tingyuan Biopharmaceutical Co., Ltd. has been established with a registered capital of 500,000 RMB [1] - The legal representative of the company is Yang Dezhong [1] - The business scope includes research and development of biochemical products, production and sales of chemical products (excluding licensed chemical products), and import and export of goods and technology [1]

Company and Industry Overview * **Company**: Seatrium Limited (OTCPK: SMBMF) * **Industry**: Offshore & Marine Engineering, Energy Transition * **Focus**: Building FPSOs, Offshore Wind Projects, Repairs & Upgrades Key Financial Highlights * **Revenue**: SGD4.0 billion (39% increase YoY) * **Underlying EBITDA**: SGD390 million (9x increase YoY) * **Underlying Net Profit**: SGD115 million (turnaround from SGD264 million loss YoY) * **Net Order Book**: SGD26.1 billion (10-year high) * **Free Cash Outflow**: SGD1.0 billion (mainly due to working capital needs) Business Performance * **Strong Order Backlog**: Secured SGD13 billion in new orders in H1 2024, including FPSOs for Petrobras and TenneT's HVDC Offshore Converter Platform. * **Project Execution**: Focus on project execution, cost management, and operational efficiency driving profitability. * **R&D and Sustainability**: Investing in R&D for cleaner and greener solutions, including zero routine flaring and venting technologies. * **Repairs & Upgrades**: Growing segment contributing to steady baseload revenue. Strategy and Outlook * **Long-term Strategy**: Leverage industry tailwinds to transform and achieve 2028 financial targets. * **Global Delivery Model**: Integrating global assets and workforce for efficient operations and scalability. * **Sustainability**: Commitment to sustainability through the Sustainable Finance Framework and KPIs. * **Industry Outlook**: Positive outlook for offshore & marine industry, supported by demand in oil & gas and renewables sectors. Key Questions and Answers * **Profitability in H2 2024**: Management committed to sustaining improved financial performance for the full year. * **Billion Dollar Contracts**: Healthy order pipeline with potential for more billion-dollar contracts. * **Gross Margin**: Target mid-teens gross margin levels, driven by project execution and series-building strategy. * **Legacy Projects**: Majority of legacy projects expected to be completed by end-2024. * **Cost Savings**: On track to achieve SGD300 million in annual recurring savings by 2025. * **Debt Refinancing**: Proactive approach to managing cost of capital and working capital requirements. * **Share Buyback**: Continuing to execute SGD100 million share buyback program. Conclusion Seatrium Limited delivered strong financial results in H1 2024, driven by a robust order book, improved project execution, and focus on sustainability. The company is well-positioned for future growth and profitability, supported by its global delivery model and commitment to the energy transition.