PhillipCapital has initiated coverage on Sembcorp Industries (SCI) with a “buy” call and a target price of $2.72, representing a 41.7% upside on the counter.

The call comes following the completion of the rights issue by Sembcorp Marine (SembMarine) after both companies announced the decoupling of their respective businesses on June 8.

“We believe the market could assign a 0.7x FY21e P/BV for SCI (ex. SCM), a slight discount to their 10-year historical average of SCI (ex. SCM), which will give us $1.75/share,” writes senior research analyst Terence Chua in a report dated September 9.

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