Brokers' take
Sembcorp Marine | Buy (maintained) Sept 2 close: S$1.16 Target price: S$1.80 Citi Research, Sept 2
SEMBCORP Marine (SMM) has announced that it has clinched a slew of new contracts with a combined value of S$400 million. This bout of new orders bring the year-to-date FY19 order win tally to S$575 million, about 30 per cent of our full-year FY19E target of S$2 billion. We estimate a roughly 15 per cent accretion to the June 2019 ex-Sete order book of S$2.1 billion.
We value Sembcorp Marine on a price/book multiple, as we view this as a more relevant benchmark at this stage of the cycle, given the volatility expected of earnings. Our S$1.80 target price is based on a 1.7 times P/B, 0.7 standard deviation below its long-term average of 2.6 times, in-line with the previous time SMM last emerged from the order trough (post-GFC in 2009).
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
TikTok tells advertisers: ‘We are not backing down’
EV automakers get reprieve in US tax credit rules
Nomura, Mizuho face losses on All Blue fund’s failed trades
Stablecoin Tether steps up monitoring in bid to combat illicit finance
HSBC asked by US$890 billion investor group to set energy goal
BHP’s biggest rivals sit on the sidelines of Anglo M&A drama