"Margin improvements over time will be driven by greater revenue share of new projects contracted at better margins; divestment of non-core assets; unwinding of intangible assets recognised during the formation of Seatrium; and ongoing commitment to cost management," says Lim.
The company reported a net order book of$21.3 billion as at March 31, versus $23.2 billion as at last December. "The cadence of contract wins seems to have slowed," observes Lim.
Nonetheless, in one positive aspect, she says the management seems confident direct tariff impact on its business will be fairly contained, though some customers may be waiting on project decisions given macroeconomic uncertainty.
Given the downside risks to order wins, Lim has trimmed her revenue forecasts and also fine-tuned her assumptions, thereby deriving a fair value of $2.76 from $2.82 previously, based on a valuation multiple of 1.4x P/B.
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Saetrium shares were up 1.46% to $2.09 as at 2.10 pm.
