Sembcorp Industries

Sembcorp Industries: OCBC maintains BUY with $6.48 TP. Note that SCI announced last week that it will expand its water business in China’s Liaoning Province with two new wastewater treatment projects in industrial parks in Panjin City. House see the initial phases of these projects as incremental expansions in China, adding about 10% to the group’s total industrial water capacity in the country. The group’s utilities business in China has seen good growth over the years, with net profit increasing from $6m in 2009 to a forecasted S$50m this year. With the expertise to provide utilities like energy, water and wastewater treatment which will be in demand due to China’s growth, we are optimistic on the long-term prospects of China as a key market for the group. Moreover, SCI has expertise on sustainable living with a focus on environmental protection, which should be in demand in China due to the country’s environmental problems.