Written by The Edge
Friday, 13 August 2010 11:50
Sembcorp Industries (U96.SG) +0.7% at $4.13 in thin trade, hardly swayed by improved 2Q10 results as investors prefer to wait for outcome of unit SembMarine’s (S51.SG) bids for some of Petrobras’ 28 rig projects, possibly due this month, says Dow Jones.
Shares not expected to clear 10-day moving average, last at $4.22. Still, analysts generally agree valuations remain attractive.
“Sembcorp Industries appears to be a cheaper alternative to ride SembMarine’s increasing newbuild orders,” says Royal Bank of Scotland, which has Buy call with $4.70 target. 2Q10 earnings +13.6% on-year at $161.2 million on higher profits from SembMarine, utilities business.
Profit from utilities division may increase in coming quarters with Sembcorp having completed acquisition of water company Cascal, which should start contributing from 3Q10.
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