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IIFL recommends a BUY at Target Price of $7.01
Sembcorp Industries will ride the offshore marine up-cycle for the
next three years. Its utilities and industrial parks businesses act
as a stabiliser to the cyclical rig-building business. We expect
group core earnings in FY11 to remain flat, despite a 14% decline
in Sembcorp Marine’s profit contribution, and 18-20% group
earnings growth in FY12 and FY13. We believe that its non-marine
businesses, with solid assets base and fundamentals, are
underpriced by 45%. We upgrade our FY11 earnings estimates by
5% to S$761m and raise our target price by 3.1% to S$7.01. We
retain BUY.
Smoother earnings: Sembcorp Industries has smoother earnings than
its listed subsidiary Sembcorp Marine. We expect 27% and 15% earnings
growth in utilities and industrial parks, respectively, which will fully
compensate for a 14% decline in offshore and marine earnings in FY11.
Sembcorp Marine’s earnings will rebound from FY12, and boost group
earnings by 20% and 18% in FY12 and FY13, respectively.
Solid utilities assets base: As an assets owner, Sembcorp Utilities has
stable base earnings (in contrast to EPC contractors). It has solid power
and water assets in Singapore and China, and is developing a 1.3GW coal
generation plant in India. In utilities, we expect the current assets
pipeline to deliver 27%, 16% and 12% earnings growth in FY11, FY12 and
FY13, respectively. Its Middle-Eastern assets are safe, though the
company will shift its strategic focus to China and Southeast Asia.
At the top of the property value chain: Sembcorp Industries’ industrial
parks business is moving toward the “integrated township” model, which
encompasses commercial and residential properties. Yet it is not a normal
property developer – it acts as the master developer in its Vietnam and
China projects, thus having limited downside risks. In industrial parks, we
forecast 15%, 25% and 27% earnings growth in FY11, FY12 and FY13,
respectively. Its prestigious Nanjing project will take off in FY14.
Significantly underpriced: Even in comparison to our relatively
conservative valuations (10x P/E for utilities and 1.5x P/B for industrial
parks), the market has currently under-priced Sembcorp Industries’ nonmarine
businesses by 45%. We raise our target price by 3.1% to S$7.01
on a 5% FY11 earnings upgrade. We retain BUY.
Good Luck
I was a bit curious as 'sold' may mean the whole company being bought...
Singapore energy, water and marine group Sembcorp Industries (SCIL.SI) will start the construction of a $900 million cogeneration plant in Singapore to provide electricity and heat for industrial customers, the Business Times reported on Tuesday.
The plant, with a total capacity of 800 megawatts of power, will be located in Jurong island and the first phase of the project is expected to commence operations by the second half of 2013, the paper reported, citing the company.
“Sembcorp said that it expects to fund the latest $900 million expansion through a mix of bank borrowings and internal resources,” the paper said.
According to the report, the plant will be fuelled by piped natural gas from Indonesia and liquefied natural gas, for which Sembcorp has signed a long-term supply agreement with Singapore’s LNG aggregator BG Group.
/theedge/
goldman report makes sense. sci is just about utilities. nothings else except sembmarine, which share the same word SEMB. If you stare at the chart, sci was in a very steady up trend without a decent pullback. though i speculate loss in maintenance work for infrastructure (eg, processing plant vs production output).
Defensive in a sense that its was involved in essential products like water and gases. Defensive counter often noted low PE, because of comsumer spending power, can either tap more or less depending of wallet watch 
one impt thingy to note, how come dividends so less this time? ??krisluke ( Date: 28-Feb-2011 12:54) Posted:
| SembCorp off 1.8% final dividend may disappoint - Goldman Sachs |
| Written by Dow Jones & Co, Inc |
| Monday, 28 February 2011 10:20 |
SembCorp Industries (U96.SG) is down 1.8% at $4.81 after the conglomerate Friday says its 4Q net profit falls 12% on year to $228.7 million, above the S$165.7 million tipped in a Dow Jones poll of analysts revenue falls 14.5% to S$2.07 billion.
Goldman Sachs says 4Q10 net profit was 44% above its expectations “" the beat came mainly from its O& M division. The utilities unit (which investors care more about) reported net profits of $54 million,” which was 9% below its forecast but in line if excluding the boiler 5 writedown.
“We see the results as neutral for the share price, as the O& M beat was already known when Sembcorp Marine (S51.SG) reported...and that the utilities profits were in line with expectations.”
It adds the final dividend of $0.17 was also in line “but may disappoint investors who hoped SCI would partially pass through SMM's attractive special dividend to its own shareholders.”"
The house ups its 2011-12 earnings forecasts by 5%-7% it also raises its target to $4.70 from $4.40, but keeps its Sell call.
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many Quarters never report profit liao. But can be a good catch. Two issues:
1) UK inflation fear.
2) mid east unrest.
btw, what price is best to enter (in range bound) ?
New123 ( Date: 28-Feb-2011 15:09) Posted:
| Soon you will see its prices move up to $5.30 doing catch-up with SembCorp Marine. |
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Soon you will see its prices move up to $5.30 doing catch-up with SembCorp Marine.
| Daiwa raises Sembcorp Industries target to $5.58 |
| Written by Thomson Reuters |
| Monday, 28 February 2011 |
Daiwa has raised its target price for Singapore energy, water, and marine group Sembcorp Industries (SCIL.SI) to $5.58 from $5.42 and kept its outperform rating on the firm.
Sembcorp Industries said on Friday its fourth quarter net profit fell 12% to $228.7 million from a year earlier mainly due to weaker performance from marine and utilities.
Daiwa said Sembcorp Industries’ results were better than expected due to strong sales at a residential property development project in Vietnam.
The brokerage has raised its 2011 adjusted net profit forecast for Sembcorp Industries by 15.7% to $692 million.
“Potential positive share price catalysts are new rig-building contract announcements by SembMarine and our view that the company could benefit financially by selling its utilities projects to a trust,” said Daiwa in a report.
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| SembCorp off 1.8% final dividend may disappoint - Goldman Sachs |
| Written by Dow Jones & Co, Inc |
| Monday, 28 February 2011 10:20 |
SembCorp Industries (U96.SG) is down 1.8% at $4.81 after the conglomerate Friday says its 4Q net profit falls 12% on year to $228.7 million, above the S$165.7 million tipped in a Dow Jones poll of analysts revenue falls 14.5% to S$2.07 billion.
Goldman Sachs says 4Q10 net profit was 44% above its expectations “" the beat came mainly from its O& M division. The utilities unit (which investors care more about) reported net profits of $54 million,” which was 9% below its forecast but in line if excluding the boiler 5 writedown.
“We see the results as neutral for the share price, as the O& M beat was already known when Sembcorp Marine (S51.SG) reported...and that the utilities profits were in line with expectations.”
It adds the final dividend of $0.17 was also in line “but may disappoint investors who hoped SCI would partially pass through SMM's attractive special dividend to its own shareholders.”"
The house ups its 2011-12 earnings forecasts by 5%-7% it also raises its target to $4.70 from $4.40, but keeps its Sell call.
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Quote
Sembcorp Industries. FY10 core profit of S$761m was 20% above our estimate, thanks to stronger-than-expected Industrial parks and Utilities Singapore operations. Maintain Outperform with higher TP of S$6.53. • UOB. Although 4Q10 core net profit (S$583m) beat both consensus and our estimates - Cimb
Macquarie has raised Sembcorp Industries’ (U96.SG) target price to $5.20
Sembcorp Industries opened Asia’s largest water-recycling plant in Singapore today.
The company will operate the facility under a 25-year contract with the city-state’s
Public Utilities Board. The plant can handle as much as 50 million gallons of water
a day, according to a statement handed to reporters in Singapore today.
On the same day, Macquarie also raised Sembcorp Industries' target price to $5.20 from
$4.20.
“We think the utilities division net profit will likely resume an upward trajectory.
This, plus potential upgrades at the marine division, in our view makes SCI an outperformer,
with more upside than SMM,” Macquarie says.
The Edge 03 May 2010
INCORPORATION OF JOINT VENTURE COMPANIES IN BRAZIL
Sembcorp Industries Ltd announces the formation of a joint venture company,
SMU Energia e Serviços de Utilidades Ltda (SMU), in which its wholly-owned
subsidiary Sembcorp Utilities (BVI) Pte Ltd (SCU BVI) holds a 33.3% share,
Utilitas Participações S.A. holds a 33.3% share and Mitsui & Co., Ltd. holds
a 33.4% share. SMU has further signed an agreement with Comperj Participações S.A.
to form an 80-20 joint venture, Companhia de Desenvolvimento de Plantas de Utilidades
(CDPU), which, among other objectives, will explore the feasibility of the implementation
of a utilities project in Brazil.
http://info.sgx.com/webcorannc.nsf/vwprint_portal/4205BD0E70ACBA9D48257714000220A3?OpenDocument
SEMBCORP PROPOSES VOLUNTARY TENDER OFFER TO ACQUIRE SHARES IN
CASCAL, A LEADING PROVIDER OF WATER AND WASTEWATER SERVICES
-
shareholding
Irrevocable undertaking by majority shareholder, Biwater to tender its 58.4%
-
shares have been validly tendered and not withdrawn or US$6.40 per share, if at
least 17,868,543, but less than 80% of the outstanding common shares have been
validly tendered and not withdrawn
Offer price of US$6.75 per share, if at least 80% of the outstanding common
-
SINGAPORE, April 26, 2010 –
wholly owned subsidiary, Sembcorp Utilities Pte Ltd (Sembcorp Utilities) has entered into a
tender offer and stockholder support agreement with Biwater Investments Limited (Biwater), to
acquire Biwater’s 17,868,543 shares of Cascal N.V. (Cascal) (representing approximately
58.4% of the outstanding common shares of Cascal), a New York Stock Exchange-listed
company and leading provider of water and wastewater services, and to launch a tender offer to
acquire all of the outstanding common shares of Cascal.
Tang Kin Fei, Group President & CEO of Sembcorp Industries said, “This acquisition will
transform Sembcorp into a global water service provider and provide the platform for the Group
to accelerate our growth in the future. We will have water and wastewater facilities in 31
operating locations in 11 countries around the world, and our water capacity in operation and
Major milestone for Sembcorp in the fast-growing water sectorSembcorp Industries Ltd (Sembcorp) today announces that its
PRESS RELEASE
2
under development globally will increase by 50% from four million to close to six million cubic
metres per day.
“We are excited about the growth prospects that Cascal brings to Sembcorp. Cascal’s
experience in the municipal water segment and strong market knowledge from its international
operations are excellent complements to Sembcorp’s strong operational and technical expertise
in industrial water and wastewater as well as in developing and operating water reclamation and
large scale desalination plants.”
Commenting on the transaction, Lawrence Magor, Chief Executive Officer, Biwater, said,
“Following an extensive process to find our preferred buyer for our stake in Cascal, this
transaction will allow Biwater to reduce significantly its debt, whilst providing Cascal with a new
shareholder which is well placed to support the continued growth of the company."
The acquisition is expected to be accretive to earnings starting from the second year after the
acquisition. Transaction costs will be incurred within the first year of acquisition.
About Cascal
Cascal is a leading provider of water and wastewater services. The company operates
internationally in
Africa, Indonesia, China, Chile, Panama, Antigua and the Philippines) and four continents with a
growing customer base of homes and businesses that represent a total population of
approximately 4.7 million people. Cascal is currently one of four companies in the running to be
named the Water Company of the Year in the Global Water Awards 2010. In 2009, its whollyowned
UK subsidiary was ranked the UK’s number one water company for overall performance
in service and delivery by the country’s water services regulator. In addition, Cascal’s South
African operations were amongst only 5% of the country’s water networks to be given “Blue
Drop” status by the Department of Environment and Water Affairs, in recognition of their
provision of high quality water services.
As reported in Cascal’s annual report for the financial year ended 31 March 2009 (prepared
based on Dutch GAAP), Cascal’s revenue, earnings before interest, tax, depreciation and
amortisation (EBITDA) and profit after tax and minority interest (PATMI) were approximately
21 operating locations across eight countries (the United Kingdom (UK), South
3
US$163.4 million, US$59.1 million and US$17.9 million respectively (equivalent to
approximately S$228.8 million, S$82.7 million and S$25.1 million respectively). Cascal’s net
debt, as reported in Cascal’s interim report for the three month period ended 31 December
2009, was US$210.3 million (equivalent to approximately S$294.4 million).
Strategic Rationale
Sembcorp is a leader in the provision of energy, water and on-site logistics and services, and
Singapore’s largest water management company. The acquisition of Cascal is expected to
accelerate the growth of Sembcorp’s water business, growing the capacity of Sembcorp’s water
and wastewater facilities by 50% from four million cubic metres per day to close to six million
cubic metres per day.
Cascal’s experience in the municipal water segment and market knowledge from its
international operations is expected to provide Sembcorp with additional competencies to
complement its strong operational and technical expertise in the industrial water and wastewater
sector, as well as its track record in developing and operating water reclamation and large scale
desalination plants. The acquisition is expected to transform Sembcorp’s water business,
extending the business’ global footprint to 31 operating locations worldwide across 11 countries.
In addition, Cascal has a proven track record of expansion and growth and has demonstrated its
expertise in evaluating and implementing municipal water projects, as well as negotiating and
operating water supply concessions.
Sembcorp achieves financial close for US$1 bln Oman project
By ANGELA TAN
Sembcorp Industries on Tuesday announced that it has achieved financial close for its US$1 billion combined power and desalination plant in Salalah, Oman.
Around 75 per cent of the cost for the project, first announced on November 23, 2009, is being funded through 17-year non-recourse project finance loans, with the remaining 25 per cent by shareholder loans and equity.
The non-recourse project finance loans are being provided by Standard Chartered Bank (also the Financial Advisor), Bank of China, China Development Bank Corporation, Bank Muscat, KfW-IPEX Bank and Sumitomo Mitsui Banking Corporation as Mandated Lead Arrangers, and National Bank of Oman and Bank Sohar as arrangers.
SembMarine just reported a very good set of results, and its sales of 36M Cosco shares reaped in S$200+M which will have positive impact on its FY2007 results. So SembCorp should get some positive energy to ionise the bad breath that given out recently, provided its PR dept know how to enhance on this positive energy to boost SCI image next Tuesday.
Looks like traders are expecting some goodies soon
SembCorp Industries had really done a good job in consolidating its core business over the lsat one year and it is really a Giant in the making. However if you look at the few players like Cosco, Keppel etc, SCI's shares value performance is really disappointing to its shareholders. Another issue is the poor Public Relation they have with the press. Look at the recent Forex losses issue with SembMarine & Labroy, Labroy is able to contain the bad news, while SCI management has done a poor job in containing the damage. They should have announce the profit they made in selling Cosco shares which may have offset a huge part of SembMarine forex loss, and hence contain the damage. Also SCI never seem to get good press from the media, did anyone know why?? Poor PR I think. Hope in the coming 3Q reporting, they can announce somethings to sweeten their loyal shareholder who had hang on with them throughout these events.
SCI's stake in SCM is 61.4%.
So, its portion of the USD250m loss is USD153m or SGD224m.
Painful but not a disaster.......hope it gets resolved quickly so the comapnies (SCI & SCM) can move on....and not drag on like the Solitiare case....where the beneficiaries were the lawyers and of course Solitaire owners.
With reference to SembCorp Marine (SCM)?s announcement concerning the unauthorised foreign exchange transactions entered into by one of its employees, SembCorp Industries (SCI) wishes in turn to inform its shareholders that the financial impact on SCI arising from the losses incurred by Jurong Shipyard Pte Ltd, if any, would be limited to the extent of SCI?s shareholding in SCM.
At the present moment, there is nothing to indicate that that shareholding is at risk on account of the matter mentioned in SCM?s announcement.
