UOBKayhian on 7 Nov 2014
FY14F PE (x): 10.9
FY15F PE (x): 10.5
Prior year period distorted by exceptional gains. Sembcorp Industries (SCI) posted net
profit of S$196m and S$560m for 3Q14 and 9M14 respectively. 9M14 net profit was
70% of our full-year forecast of S$800m. The utilities business net profit for 3Q14 and
9M14 decreased in 3Q13 and 9M13 when it included a gain from the IPO of Salalah,
which was offset by an impairment the combined effect was a net gain of S$69m made
for the operations on Teeside in the UK. Excluding these significant items, the utilities
business achieved a 10% net profit growth in 3Q14 from S$103m in 3Q13 but net profit
was slightly lower in 9M14 compared to 9M13’s S$305m.
Target price is lowered from S$5.95 to S$5.80 which is pegged to our revised sum-ofthe-
parts valuation. We value SCI’s utilities segment at 12x 2015F PE. We maintain our
BUY call.
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