Brokers' take

Sembcorp Industries | Buy

Target price: S$3.36

Jan 11 close: S$3.03

OCBC Investment Research, Jan 11

THOUGH its marine segment is facing headwinds, the longer-term outlook for the utilities segment remains positive, and the group is well-positioned to seize emerging market opportunities with its strong track record in generating and supplying power, steam and natural gas; and providing total water and wastewater solutions for industries.

In Singapore, however, the group has been facing more competition due to an overcapacity issue in the power generation market. Looking ahead, there will be full liberalisation of the retail electricity market (this is separate from the wholesale market). SCI's genco is not in the top three in terms of generation capacity, and we expect that this impending development would level the playing field for industry player…