Both SembMarine and Keppel are also likely to benefit from forecast novation of their Sete Brasil orders to foreign players from 2H18 and ultra-deepwater drilling rig tenders in Brazil from Petrobras & Total, according to Upstream.
"We expect its Gravifloat platform to gain traction and the offshore exploration & production industry to incorporate a lower oil price environment," says Deutsche, "we also believe that SembMarine is better positioned to secure more projects, given its wider capabilities than peers."
Deutsche is forecasting SembMarine to win new orders to strengthen over the next few years and exceed $4 billion by FY19.
With crude prices now above forecasts, Deutsche also sees grounds for a further increase in valuation for SembMarine.
In contrast, Deutsche is downgrading Keppel Corp to "hold" as current valuations seem fair.
Deutsche says Keppel is structurally less exposed to the O&M sector compared to SembMarine and even with our positive view on the property assets, has less limited upside.
Key upside risks include faster-than-expected property or land sales and Brent Crude rising beyond US$75/bbl.
As at 3.23pm, shares of SembMarine and Keppel are trading at $2.79 and $8.75 respectively.
