WiseVest - Labroy to compete with the big shipyards?

Labroy Marine announced yesterday that it has won its first contract ever to build jack-ups. This latest contract is worth US$292 million and would add on to its bulging contract book, which would be over S$1 billion. The stock is currently trading at S$1.40 per share which equals to a P/E ratio of 21.2x for FY05 earnings, and 17.3x for future FY06 earnings. Comparing this to SembCorp Marine's high P/E ratio of 34.7x of FY05 earnings and 20.2x for future FY06 earnings, Labroy seems to be a good buy and especially so if it would be able to gain more clients in this lucrative and booming jack-up contracts.

However, as SembCorp Marine and Keppel Corp. has already won several such contracts since the beginning of this year, it would be seen that Labroy would be competing with such companies.