Seatrium's sequential earnings improvement is likely on track, CGS International analysts say in a research report as they maintain the stock's add rating.

The shipbuilder's legacy projects are in final stages of completion and could be delivered by early 2025, the analysts say.

After completion of these contracts, the shipbuilder's gross margin should continue to have improved in 2H 2024 and beyond, the analysts add.

CGS International forecasts the Singapore-listed company's gross margin to have widened to around 7% in 2H 2024 from 3.7% in 1H 2024. The brokerage raises the stock's target price to S$2.90 from S$2.69 to reflect a valuation roll-forward. Shares are 1.35% lower at S$2.20.