by winston » Mon Nov 12, 2012 10:29 am
not vested
Sembcorp Industries- 3Q12: Within our expectation. 2013 and 2014 earnings forecasts cut by 7- 11% on lower marine earnings. Target price lowered by 7%, but maintain BUY.
(SCI SP/BUY/S$4.99/Target: S$5.75)
FY12F PE (x): 12.0
FY13F PE (x): 11.4
Another quarter of stellar utilities earnings. Sembcorp Industries (SCI) reported a net profit of S$181m (-18% yoy) and S$549m (-2% yoy) for 3Q12 and 9M12 respectively.
The dip in 3Q12 earnings is primarily due to lower marine earnings as earlier 3Q11 earnings had lumpy recognition in the Songa Eclipse semi-submersible rig (semi) project and exceptional interest income. The utilities segment saw another strong quarter with a reported 3Q12 net profit of S$100m, +27% yoy.
Another strong utilities quarter upholds relative defensiveness. SCI provides a better refuge than higher-beta Sembcorp Marine (SMM) in times of uncertainty.
Its utilities earnings growth in 2012F-15F will be driven by three additional power plant capacities namely:
a) the Salalah IWPP expansion in Oman (starting 2Q12),
b) Sembcorp Cogen’s new 400MW power plant (end-13) in Singapore, and
c) a 49% stake in Thermal Powertech Corp which is building a 1,320MW power plant (1H14) in Andhra Pradesh, India.
We have cut our earnings forecasts for SMM. Accordingly, we cut our earnings forecasts by 7-11% and target price by 7% to S$5.75. However, we maintain our BUY call as utilities will gain momentum as new projects come on-stream.
Source: UOBKH
It's all about "how much you made when you were right" & "how little you lost when you were wrong"