Here's the main drag in Kreuz Holdings' growth potential

Amidst its 'enviable' track record.

According to DBS, while Kreuz has built up an enviable track record of project execution and earnings delivery, growth is constrained to an extent by the availability of suitable vessels to perform turnkey subsea contracts.

Here's more:

Currently, it is chartering in at least 2 assets from the third party market to deliver its projects. This is expected to change once its newbuild state-of-the art multi-purpose support vessel arrives in 2015.

Kreuz also has the option to build another similar unit and we believe Kreuz will be able to bid competitively for global SURF (subsea, umbilicals, risers and flowlines) projects of higher value when these vessels are delivered. Funding is not an issue, with balance sheet in a healthy position.

Recommendation
Maintain BUY. The SURF market continues to be one of the brightest spots in the offshore O&G services space, backed by an increase in the development of oil and gas fields in deeper waters and development of marginal fields which need tie-backs to existing infrastructure.

With its asset light strategy, strong execution track record and ROE of close to 25%, Kreuz remains one of our top picks in the sector. TP raised to S$0.95, as we roll over valuations to blended FY13/14 earnings and raise our PE multiple to 9x.