Seatrium: Guiding for a Wider Net Loss in 2023; Shares Fairly Valued

Following a strategic review of its current business, no-moat Seatrium forecasts that its 2023 net loss is expected to be significantly higher than 2022’s net loss due to a material noncash write-down on surplus noncore assets, including excess and obsolete inventories. We keep our fair value estimate of SGD 0.12 and earnings estimates unchanged, pending the release of Seatrium’s final results in late February 2024. We have already forecast a 2023 net loss of SGD 438 million versus a net loss of SGD 261 million in 2022. We expect Seatrium to turn profitable in 2024 on the back of a recovery in its net order book. In our view, Seatrium is currently fairly valued, and new order wins will be key to driving its future share price performance.