Sembcorp Industries (SCI): CLSA upgraded SCI from Sell to Underperform with TP at $3.99, following the 28% share price in the past 12 months.
House believes that downside risks are priced in.
SCI's international expansion strategy in the utilities segment is paying off with contribution from projects expected to rise going into FY17.
However, continued headwinds in Singapore power and the marine sector imply that earnings will not pick up before 2017.
ST Engineering is its preferred pick among the Singapore-focused conglos, followed by SCI and then Keppel Corp.
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