Sembcorp Industries: IIFL, UBS reiterate Buy, raise TP to $7.01 (from $6.80) and to $6.73 (from $6.24) r’ptively.
Note that ex-SMM, SCI stub trades at near historical low, with share price negatively affected by MENA political unrest. But believe the relative derating is overdone, and the non-marine businesses are underpriced by 45%...
Understand business is as usual at Fujairah, and the Salalah plant construction is on track for its 2H11 start. Expect SCI’s active project pipeline to provide regular earnings catalysts amounting to ~$100m of net profit over the next 4yrs, which translates into 2010-14E CAGR of 10%...
Growth drivers include Cascal, SembGas expansion (4Q11), Salalah IWPP (2012), India genco (2013/14) and Singapore cogen plant (2013). Meanwhile, earnings from Marine, Parks should remain robust, based on order books.
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