SembCorp Industries

SembCorp Industries: Reported strong set of expected 3Q Net Profit at $244.1m, +68.8%YoY and +51.4%QoQ. Excluding an exceptional item comprising of $32.1m, Net Profit was at $212m, +43%YoY and +15.5% vs consensus estimates of $183.5m. Rev at $2.2b was however
-16.4%YoY and flat QoQ...

Result brings 9mFY10 Net profit to $564.2m, +33%YoY, while 9m10 Rev at $6.7b, was
-7.5%YoY. Strong results attributed to SembMarine’s stellar performance, with contribution growing 40% to $347mYoY, while utilities Net Profit increased 10% to $176.9mYoY, with grp’s ROE at a strong 21.1%...

Going forward, grp expect Utilities Operations to remain steady, especially in China, where contributions grew 180%, intends to enter the retail power market in the UK and is reportedly interested in BP’s 1/3 stake in ‘Phu My 3’ in Vietnam. Grp appears well positioned to benefit from PUB’s water related projects over the long term, while expansion on Jurong Island appears to be gaining grond....

Marine business remains firm, with current orderbook at $4.7b, inclusive of $2.3b orders secured to date and streadily rising operating margins…

Grp’s balance sheet remains strong with a net cash position of $1.4b. We note that at current levels, grp trades at an annualized EPS (excluding one off item) of 40c, translating to an FY10E P/E of 12.31x. RBS, CIMB and Deutsche has Buy Call with TP of $5.60, $6.06 & $6.60 respectively. Support eyed at yesterdays intraday low of $4.70.