Sembcorp Industries

Sembcorp Industries: Daiwa highlights that project execution will be key for Sembcorp Industries in 2014. 2 major projects next year underpins Daiwa’s estimate of 18% y/y EPS growth, i.e. 1) 400MW co-generation plant in Jurong Island, and 2) 1320 MW coal-fired power plan in India coming online in 2H14. Daiwa adds that the timeliness of these projects will be a key share-price driver. SCI will also focus on projects that came online in 2013, such as the expansion of its $154m multi-utility facilities business on Jurong Island in early Dec 2013. The biggest risk for 2014 will still be the softening spark spreads in Singapore, from excess power-generation capacity. Daiwa remains O/PF on SCI with raised target price of $6.00 (increased from $5.80).