Sembcorp Industries: Positioning for the future
Sembcorp Industries (SCI) reported a 12.9% YoY rise in revenue to S$2.1b and a 11.3% increase in net profit to S$119.1m in 1Q17, accounting for 27.0% and 26.5% of our full year estimates, respectively.
Urban development was the segment that saw the most growth in the quarter due to higher land sales in China.
Over the next few months, management will be undertaking a complete review of the group’s businesses and strategic direction.
The focus will be on “performance, sustainability and value creation”. Whatever the results of the review, we believe that it should be taken in the interests of the group’s shareholders and stakeholders.
There may also be value to be unlocked from the exercise.
We fine tune our estimates and our fair value estimate slips from S$3.69 to S$3.48. Maintain BUY.
Source: OCBC