SembcorpInd

SembcorpInd: In line stable 1Q11 results, rev at $2.0b -16.8%yoy and net profit at $159.9m +0.7%yoy. Net profit at Marine was flat yoy at $91.8m with 4%yoy growth in Utilities driven by fuel prices and consolidation of Cascal in July FY10. Growth in utilities business for all regions except UK (net profit -52% yoy) due to weaker spreads which are expected to have bottomed…

Co’s US$1b Salalah project is on track to complete in Jul 2011 and civil work for the 1320MW power plant is underway. The utilities business trades at attractive stub value 6-8x fwd P/E below hist avg of 9-10x and peers at 15x...
LowXuYang: SMM at 14.1x which suggest a cheaper entry. Houses maintaining Buy include DB (TP$7.00), Citi (TP$5.80), RBS (TP$6.60), UBS (TP$6.73) but GS rates Sell with TP$4.80.

DB highlights that implied P/E of SMM through SCI is 11.7x vs direct exposure to SMM at 14.1x which suggest a cheaper entry. Houses maintaining Buy include DB (TP$7.00), Citi (TP$5.80), RBS (TP$6.60), UBS (TP$6.73) but GS rates Sell with TP$4.80.