Brokers' take

Sembcorp Industries | Buy Target price: S$3.43 Aug 23 close: S$3.02 OCBC Investment Research, Aug 23

Sembcorp Industries' (SCI) management is currently in the process of undertaking a strategic review of the group's businesses, and this is expected to be completed by Q4 2017. There can be various scenarios which can happen, but we also note management's comment in last quarter's results briefing that while it seeks to take a prudent approach in whatever it does, it also wants to be agile and capture opportunities when the market recovers. As such, some of the possible outcomes include the divestment or privatisation of Sembcorp Marine. For the funding of the latter, divestments of non-core assets could help to shore up capital, and this could include Sembcorp Design and Construction, as well as Singapore Mint. There could also be divestments of certain utilities assets in more mature markets where the projected rate of growth is lower than assets in emerging markets...That said, whatever the results of the strategic review, we believe it will be done in the interests of shareholders. Meanwhile, since we downgraded our rating to "hold" on Aug 4, SCI's share price has corrected by 7.2 per cent compared to the Straits Times Index's 2.4 per cent drop. The stock also closed at a recent low of S$2.94 on Monday.

Singapore telcos | Neutral RHB Research, Aug 23