Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD
Research House: IIFL
The brokerage said it expects 27% and 15% earnings growth in utilities and industrial parks, respectively, which will fully compensate for a 14% decline in offshore and marine earnings in the firm’s 2011 financial year.
Company Name: SEMBCORP INDUSTRIES LTD
Research House: IIFL
IIFL has raised its target price on Singapore energy, water and marine group Sembcorp Industries (SCIL.SI) by 3.1% to $7.01 and maintained its buy rating.
IIFL said that the market has significantly under-priced Sembcorp Industries’ non-marine businesses by 45%, compared with its valuations of 10 times price-to-earnings for utilities and 1.5 times price-to-book for industrial parks.
IIFL said that the market has significantly under-priced Sembcorp Industries’ non-marine businesses by 45%, compared with its valuations of 10 times price-to-earnings for utilities and 1.5 times price-to-book for industrial parks.
The brokerage said it expects 27% and 15% earnings growth in utilities and industrial parks, respectively, which will fully compensate for a 14% decline in offshore and marine earnings in the firm’s 2011 financial year.
Sembcorp Utilities has solid power and water assets in Singapore and China, and is developing a 1.3 gigawatt coal generation plant in India, IIFL said.
The brokerage added that Sembcorp Industries’ industrial parks business is moving towards the "integrated township" model, which encompasses commercial and residential properties.
But it acts as the master developer in its Vietnam and China projects, thus having limited downside risks, IIFL noted.
At 10:43 a.m., Sembcorp Industries shares were up 3% at $5.51 on a volume of 3.6 million shares.
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