Sembcorp Industries

Sembcorp Industries: Stan Chart notes that water demand from Jurong Island could double within the decade according to the PUB, which will also imply material growth in demand for power. Currently less than two-thirds of the land in Jurong Island is utilised, and the additional land reclamation is underway for future investments. Jurong Island currently account for c. 60% of SCI's utilities business, and the house EPS forecast has a potential earnings upside as it only includes committed utilities projects. House maintains OUTPERFORM with TP of $5.90, implying a SOTP-based discount of 15% to other conglomerates, and a 40% discount to other Asian utilities.