Singapore is one of the busiest ports in the world, with the shipping and maritime industry playing a crucial role in our country’s economy. Having evolved from a small regional ship repair and building centre, Singapore has transformed its shipping industry into one that is globally renowned for its reliable and convenient range of comprehensive marine services. While many individual investors would likely be familiar with the heavyweights in the shipping and marine industry, such as Keppel Corporation (SGX: BN4) and Sembcorp Marine (SGX: S51), there are many other important but smaller players within the industry that sails…
Singapore is one of the busiest ports in the world, with the shipping and maritime industry playing a crucial role in our country’s economy. Having evolved from a small regional ship repair and building centre, Singapore has transformed its shipping industry into one that is globally renowned for its reliable and convenient range of comprehensive marine services.
While many individual investors would likely be familiar with the heavyweights in the shipping and marine industry, such as Keppel Corporation (SGX: BN4) and Sembcorp Marine (SGX: S51), there are many other important but smaller players within the industry that sails beneath the radar.
The marine-support sector has progressed in line with the growth of ship repair, shipbuilding and rig-building activities. Players within the sector range from small to medium-sized workshops, to comprehensive factory facilities across many disciplines that can even include telecommunication services.
Here are three companies in the marine-support sector.
SBI Offshore (SGX: 5PL)
Established in 1996, SBI Offshore is involved in supplying drilling, marine, life-saving and related equipment to the offshore and marine industry. Besides that, the firm also provides customised offshore engineering and equipment solutions from their manufacturing facilities in China.
In a nutshell, SBI offshore markets equipment to offshore oil rig builders. Such equipment include lifeboats, high pressure pipes, fittings, offshore drilling equipment and heating, ventilation, and air conditioning equipment. Its marketing and distribution network has a geographic reach that stretches across countries in Asia, Middle East and the Americas.
SBI Offshore last traded at S$0.117 and has fluctuated within the price range of S$0.10 to S$0.13 over the past year. It’s currently valued at 13.3 times earnings and sports a dividend yield of 1.7%.
KS Energy (SGX: 578)
KS Energy acts as an integrated one-stop energy services provider to the global oil & gas and petrochemical industries. With a headcount of 1,200 employees across 10 countries, the company’s core activities revolves around the distribution of parts and components, capital equipment charter, and the provision of drilling and rig management services.
For its distribution business, KS Energy is one of the leading distributors of oil and gas equipment, spare parts, consumables and industrial products in the region. All told, the company distributes more than 60,000 such products from over 300 international brands.
KS Energy is currently trading at S$0.44 per share, commanding a super elevated trailing P/E ratio of more than 9,000. This is due to the company’s poor performance for the last quarter of 2013 where profits came in negative. As a result, no dividends were paid as well.
CH Offshore (SGX: C13)
The company owns and operates vessels to support and service the offshore oil and gas industry mainly in its primary markets of Indonesia, Malaysia and Thailand. Presently, the group owns a fleet of 21 Anchor-handling Tug/Supply (AHTS) vessels that provide a range of services:
1) Offshore construction support
2) Support services to offshore drilling rigs and installations that include towing, anchor-handling, supply of deck, liquid and dry bulk cargoes, and supply of dangerous goods etc
3) Field support services that include emergency response, rescue, fire-fighting, anti-pollution etc.
With 30 years of experience in offshore support services, CH Offshore has an excellent relationship with many oil and gas clients including industry giants like CNOOC, Exxon Mobil, Shell, Chevron, Petronas and more.
CH Offshore currently trades at S$0.41 with no P/E ratio to speak of as it had made losses over the past 12 months due to a poor showing for the quarter ended 30 June 2013. Nonetheless, it did declare a dividend of S$0.005 per share in its latest earnings release for the six months ended 31 Dec 2013 as it managed to make a profit of US$14.1 million.
According to the Industrial Classification Benchmark (ICB), there are 26 shares classified under the subsector of Oil Services & Equipment. Because of that, retail investors who are optimistic on the resurgence of the oil and gas industry can really be spoilt for choice, considering that are many other subsectors related to the entire oil and gas industry.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.