COSCO Shipping International (Singapore) Co.(formerly: COSCO Corporation (Singapore))

[Musicwhiz]

However in next decade, Cosco has to face challenges of labour cost inflation in China & Renmbi appreciation.

If Cosco repeats past decade sucess of ship-building story for marine-offshore segment, what would happen to SembMarine & KeppFels? Is this the reason that recently Temasek has sold some (though small) stakes in SembMarine? Is Temasek seeing same head-wind for SembMarine & KeppFels as it had seen for Cosco in 2008/2009 (not remember exactly which year) when it sold entire stake in Cosco?

I believe you have made a very sensible and relevant point! Keppel Corp and Semb Marine's success in rig-building was a relatively recent phenomenon and probably took place in the last 10 years or so once the rig boom started. No doubt they are both now market leaders but I fully agree the Chinese are very good at emulating and copying, and at a much lower cost base as well.

For companies like Cosco, it will be a matter of time before they step up the learning curve and start building rigs which are as complex, if not more, than both incumbents. This will be the turning point and yes I believe the rig-building industry will change permanently once China enters the fray.

Rig-Building is both capital intensive and requires very specific skills sets. Plus, it is contractual in nature which means revenues are not consistent and recurring. In the long-term, this may mean that investing in such companies is not a good proposition.

(Not Vested in any of the companies mentioned)