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Sembcorp Marine Sell KGI Fraser Securities, Oct 23 Oct 23 close: S$2.46 Target price: S$2.07
SembMarine's Q3 FY2015 core net profit of S$49 million (-63 per cent year on year) was below our expectations, with nine-month 2015 core net profit making up 49 per cent of our core net profit estimates for FY2015 forecast. We thus slash our estimates by 9-30 per cent for our forecast period to take into account deferment of deliveries and delays from Sete Brasil in sorting out their financing problems. We reiterate our "sell" recommendation with a target price of S$2.07, pegged to 1.4 times FY2016 forecast price-to-book ratio (trough valuation multiple discounted 10 per cent to account for Sete Brasil risk). We commend SembMarine for its respectable order wins year-to-date (S$2.9 billion versus S$1.2 billion during 2009 trough levels) but remain cautious given that multiple downside risks remain.
Ascendas Reit Add CIMB Research, Oct 23 Oct 23 close: S$2.50 Target price: S$2.57
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