Here's what's in store for Sembcorp in 2017

It is expected to deliver 12% earnings growth next year.

Sembcorp Industries should look forward to next year, as it is expected to deliver 12% earnings growth, led by strong earnings in India.

According to UOB KayHian, this is likely to help offset the earnings decline from China as JV contribution from Yangcheng Coal PP expires.
UOB said, "Sembcorp Industries’ (SCI) utilities earnings are expected to shine in 2017, led by its power business. On an effective capacity basis we expect capacity growth of 28% yoy for 2017, higher than the 3% yoy growth expected for 2016."

This would then lead to the 12% growth in its utilities segment, driven by better earnings in India.

"Central to this earnings growth is Thermal Powertech Corporation India’s (TPCIL) Unit #2 which will move beyond its first year of teething issues and enter a phase of steady operations. Offsetting this growth is an estimated 14% decline in earnings from China as the JV's 25% stake in Yangcheng Coal PP expires," UOB noted.

TPCIL is expected to deliver good set of core earnings starting 4Q16, and earnings are expected to more than double in 2017.
"Higher electricity prices could provide a boost, having risen from Rp2.4/kWh in end-Sep 16 to Rp3.1/kWh in December," UOB stated.