The resultant higher levels of global offshore activity would presumably lead to "tightness" in the market and thereby push up rates for rigs and offshore support vessels, he reasons.
Loh notes that 2024 has proven to be a "strong year" for jack-ups and drillships with both day rates and utilisation rates growing.
With crude oil prices holding above US$68 per barrel, oil companies are likely to continue to "green light" offshore production projects, says Loh. Furthermore, constrained capacity of new rigs industry-wide will be "supportive" of their chartering rates and value, he adds.
Loh believes that Seatrium, which operates yards in the US, could see better-than-expected order wins given the pro-America sentiment in the US at present.
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Seatrium is now building 8 of the 11 FPSOs that major customer Petrobras has ordered. These units will be deployed offshore Brazil between 2H2024 and 2028.
Loh says that in addition, Petrobras has planned for another seven to 11 new units to come on-stream from 2029 onwards, but which has yet to contract out.
Loh estimates that these units could be between US$20 billion - US$30 billion and will need to be awarded in the next 12-24 months if production timelines are to be met.
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He has maintained his "buy" call on Seatrium along with a target price of $2.80, which is based on a P/B multiple of 1.4x is 1SD above the company’s five-year average.
Loh likes Yangzijiang Shipbuilding too, with a "buy" call and $3.60 target price based on a target PE multiple of 9.7x which is 1SD above the company’s 10-year average of 6.9x.
He believes that this premium to its average PE multiple is justified given its earnings visibility is extended into 2029, along with a "strong track record of safe and efficient shipbuilding".
Another counter favoured within the sector is Marco Polo Marine, given how its vessels are "exposed to potential upside in charter rates in 2025 and beyond", says Loh, who has a "buy" call and 7.2 cents target price
