Brokers' take

Sembcorp Industries | Buy Target price: S$4.40 Feb 26 close: S$3.20 DBS Group Research, Feb 26

We continue to like Sembcorp Industries (SCI) as it offers a unique value proposition as a proxy to ride the cyclical offshore and marine upturn, and is supported by a defensive utilities business.

Its focus on more proactive capital recycling will allow SCI to augment its balance sheet (lower gearing by 0.15 times), and enhance return on equity. Including the IPO of the India assets, we estimate that proceeds will easily exceed S$1 billion over the next two years, much higher than S$870 million of IPO/divestment proceeds achieved over the last five years.