🔥This morning, $Seatrium Ltd(5E2.SI)$ (STM) shares opened 4.8% higher to $2.18 – its biggest share price jump since 23 Sep 2025 and on trading volume that is 15 times its 20-day average
✳The share price jump has in turn led Macquarie’s trending Seatrium call warrant $Seatrium MB eCW260330(RGZW.SI)$ to gain 18.2% this morning to SGD 0.013. There are no put warrants available over Seatrium
Seatrium shares are boosted by yesterday’s after market news that its consortium with GE Vernova has been awarded a contract by TenneT to deliver a new 2.2GW offshore high-voltage direct current (HVDC) grid connection
📝On the back of this announcement, Macquarie Research (MQ) published a research report last night on 11 December with a commentary on why this contract win matters and their share price target on Seatrium
🧐Read more for the full article containing an excerpt of MQ’s report and important disclaimers:
What’s new
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Seatrium (STM) announced after market that GE Vernova and Seatrium consortium has been awarded a contract by TenneT to deliver a new 2.2GW offshore high-voltage direct current (HVDC) grid connection to BalWin5, one of Germany's offshore wind farms in the North Sea. The contract was awarded as part of the original framework agreement for up to 40 units
Why it matters
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Contract value attributable to STM estimated at S$2 billion. This is comparable to the first three HVDC contracts that were awarded in 2023. STM is responsible for the design, construction, transportation and installation of the HVDC. Work will commence in Jan-26, with commissioning planned for 2032. Margins are in-line with management's guidance of "mid-teens gross project margin" on a risk-adjusted basis. Payment is on a milestone basis.
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Year to date 2025 contract win is more than S$4 billion, with this contract win. This is slightly ahead of MQ’s contract win assumption of S$4 billion for FY25. While MQ is encouraged that STM closes the year meeting their expectations, MQ thinks the greater challenge is in FY26, when MQ expects them to secure S$9.5 billion of contract wins, or risk further depletion of their orderbook.
What now
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MQ thinks the market should respond positively to this development. MQ has an Outperform rating with a 12-month price target of $2.80 on Seatrium shares, based on a EV/EBITDA stock methodology.
Note: Macquarie Research is independent from the Warrants business, what the Macquarie Warrants desks quote from Macquarie Research may not reflect the complete analysis of Macquarie Research on the relevant company over time.
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