Sembcorp Industries: Deutsche believes utility business is markedly undervalued
-Utility FY16e P/E 4.4x vs. 10Y avg of 7.8x, close to -1 SD below 10Y mean
-Overall SCI FY16e P/E 7.9x lower than electric utility peers (14x), IPP (10.3x), water peers (15.9x)
-Low valuation is due to execution risk and outages of power plants, but Deutsche believes its overdone
-close to 4GW of new capacity to come on stream from now till 2018
-expected to grow utility earnings around 80% by 2018
-Operation experience at earlier power plants to help reduce execution risk at upcoming facilities
-Jack-up rigs order book risk at SembMarine is also fading
-Deutsche maintains Buy with TP of $3.60
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