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 th…