KGI Securities analyst Joel Ng is maintaining his “neutral” recommendation on Sembcorp Marine. He has also slashed his target price on the stock to 23 cents from $1.19 previously as valuations bottom out, and as the selling pressure abates ex-rights.

“The year ahead looks challenging as the company grapples with industry overcapacity, weak profit margins and poor order book visibility,” Ng writes in a report dated August 20.

“We believe earnings are less likely to drive its share price performance going forward. Focus will instead be on the restructuring of Singapore’s offshore & marine (O&M) industry in 2020 and likely involve a deal with Keppel Corp’s O&M business,” he adds.

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