The recent plunge in oil price has affected the oil and gas sector badly, which has rocked Semb Marine’s corporate performance. That, in turn, has dragged Sembcorp Industries’s earnings too, as marine business still contribute a significant chunk of Sembcorp’s revenue (about 45% as of Q3 2016). Sembcorp’s share price has not been spared and dropped more than 50% from $5.5 to $2.5.
However, under the doom and gloom has been a common narrative running behind the investment merit of Sembcorp: it is more than just a Marine company and it has a promising and growing utilities business that is well-positioned to capture the rising demand for energy and water treatment services among the emerging economies.
So, if an investor wished to capitalise on Sembcorp’s current depressed valuation/share price and profit from its turnaround in future that’s envisioned to be led by the utilities business, he needs to ......