SINGAPORE (Dec 17): UOB Kay Hian is maintaining a “market weight” rating on Singapore’s shipyards, with Sembcorp Industries (SCI) as its preferred pick.

The research house has a “buy” call on SCI with a target of $3.41, as the group has a stable utilities business, and exposure to Sembcorp Marine’s (SMM) improving financials.

It adds that SMM is the most direct proxy to the recovery play as it has the potential of breaking even at the operating level in 2019 and the stock is trading near -1SD to its long-term mean price-to-book ratio.

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