- We maintain our MARKET PERFORM for PVD rating while trimming our TP by ~2%.

- Our lower TP is due to 1) cutting our recurring 2022F NPAT-MI by 53% following a lower profit forecast for the jack-up (JU) fleet, assuming higher operating costs and 2) a 50-bp higher risk-free rate assumption. Meanwhile, we keep our 2023-2026F NPAT-MI nearly unchanged. 

- The recent recovery of Southeast Asian JU and utilization rates causes us to increase our 2023-2026F average JU rate for PVD. However, following weak H1 2022 results, we foresee higher operating costs for PVD’s international drilling contracts and thus raise average operating cash cost in 2023-2026F. As a result, our 2023-2026F NPAT-MI remains nearly unchanged. 

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