Brokers' take

Sembcorp Industries > Add CIMB Research, Aug 4 Aug 4 close: S$3.18 Target price: S$3.47

INVESTORS would need to wait until Q4 2017 to hear of the final outcome of Sembcorp Industries' (SCI) strategic review. We stick to our view that taking Sembcorp Marine (SMM) private is not feasible. Divestment (to whom is a question) and dividend in specie to its shareholders may not be a sweet deal for main shareholder (Temasek), with SMM's highly geared position amidst unsettled restructuring and ongoing corruption investigation in Sete Brasil.

Share price may be weighed down temporarily by management's comments on the two- to three-year wait for a power purchase agreement for Sembcorp Gayatri Power Ltd (SGPL). However, we appreciate the realistic and clear guidance after several quarters of uncertainty.