Sembcorp Industries - OCBC Investment 2017-01-31: Steadily expands overseas operations

Sembcorp Industries - OCBC Investment 2017-01-31: Steadily expands overseas operations SEMBCORP INDUSTRIES LTD U96.SI

Sembcorp Industries - Steadily expands overseas operations

  • Sembcorp Industries recently announced that its power plant in Chongqing has commenced full commercial operation following the completion of its second 660MW unit; the first unit was completed in Nov 2016. 
  • According to SCI, the S$966.5m power plant is one of the most efficient power plants in Chongqing. It was developed by a 49:51 JV between a subsidiary of SCI and a subsidiary of Chongqing Energy Investment Group, which is owned by the Chongqing municipal government. 
  • Having invested in China for over two decades, SCI’s presence now spans 15 provincial regions, and we remain positive over the company’s longterm prospects. 
  • Meanwhile, the stock is already up 12% YTD vs the STI’s 6% appreciation over the same period, and is now close to our fair value estimate of S$3.36. It also closed at S$3.27 on 24 Jan, which was a 52-week high.
  • Post Keppel’s FY16 results which saw significant impairments, there could be a dampening of sentiment on oil-related plays, barring positive surprises in the oil price. 
  • We maintain our BUY rating on SCI on a longer term basis, with dips presenting opportunities to accumulate.




Low Pei Han CFA OCBC Investment | http://www.ocbcresearch.com/ 2017-01-31
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 3.360 Same 3.360



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