Stock Name: Semb Corp
Company Name: SEMBCORP INDUSTRIES LTD
CIMB in an Oct 5 research report says: "Our takeaway from a recent SCI non-deal roadshow was the high likelihood that SCI Utilities could emerge from a recession unscathed.
"Despite threats of a recession, we are still forecasting 8% earnings growth for Utilities in FY12, backed by strong power spreads in Singapore and capacity expansion at Salalah, Oman's independent water and power plant (IWPP). At 7.5x CY12 P/E, the market appears to be pricing in a 10% earnings drop for SMM.
"SCI is the cheapest Singapore conglomerate at trough valuations of 1.4x P/BV, or 2008-09 lows. At current implied market cap for Utilities ($1.4 billion), investors are only paying for the replacement costs of existing assets on Jurong Island ($1.5 billion invested to date); the rest is free. Target price of $6.07. MAINTAIN OUTPERFORM."
Company Name: SEMBCORP INDUSTRIES LTD
| Research House: CIMB | Price Call: BUY | Target Price: 6.07 |
CIMB in an Oct 5 research report says: "Our takeaway from a recent SCI non-deal roadshow was the high likelihood that SCI Utilities could emerge from a recession unscathed.
"Despite threats of a recession, we are still forecasting 8% earnings growth for Utilities in FY12, backed by strong power spreads in Singapore and capacity expansion at Salalah, Oman's independent water and power plant (IWPP). At 7.5x CY12 P/E, the market appears to be pricing in a 10% earnings drop for SMM.
"SCI is the cheapest Singapore conglomerate at trough valuations of 1.4x P/BV, or 2008-09 lows. At current implied market cap for Utilities ($1.4 billion), investors are only paying for the replacement costs of existing assets on Jurong Island ($1.5 billion invested to date); the rest is free. Target price of $6.07. MAINTAIN OUTPERFORM."
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