Sembcorp Ind    Last:6.55    -0.07

FA and TA

Article in BT today......if this goes through, it will have positive effect for SembCorp Utilities

 

It also seeks permission to relocate units, set up 'power parks'

 

By RONNIE LIM

They want permission to outsource, or get third parties, to build, own and operate on their behalf the 'embedded' generating units - as such direct sources of power are called.

Also, as some companies face land constraints for their expansion projects, like on Jurong Island, a second change they want is for such embedded generation units to be located on separate and non-contiguous land sites, albeit on land still owned by them.

Sources had earlier told BT that the petrochemical complexes are looking to buy natural gas to fuel their own cogeneration plants producing the electricity and steam needed.

One industry official said that 'typically, such cogen plants can be 30-50 megawatts', which compares with Keppel Energy's 500-MW power station and SembCorp's 815-MW facility on Jurong Island.

The companies' third proposed change is a 'power park' concept allowing an independent genco to supply electricity directly to a cluster of companies.

The industry official said that this idea is more suited to the wafer industry which is concerned with power quality, whereas the oil refineries prefer on-site embedded units supplying steam and electricity.

The requests from the big electricity consumers are now being considered by the Energy Market Authority, which has just put out an industry consultation paper on their proposals. The move is clearly part of Singapore's continued liberalisation of the electricity market.

Making some of its own preliminary assessments, EMA said that one concern is that 'inefficient investment decisions' may occur if private companies opt for embedded generation units at the expense of commercial gencos which invest in bigger power stations, with economies of scale.

This is because under the existing grid charge structure, a company obtaining direct electricity from embedded generating units with back-up from the power system draws less power from the national grid and consequently pays less for 'expressway' capacity charges. The latter refers to national grid capacity which is shared with other consumers, whereas 'driveway' is that dedicated to each consumer, with consumers paying separate usage charges for this.

EMA said that if the contiguous land requirement is removed, there could also be a proliferation of inefficient investments in generating units spread over wide geographical areas. 'The net outcome could be significant distortion to competition and inefficient investment in grid and generation assets.'

To resolve this, grid charges could be restructured to accommodate the changes, it said.

EMA expects feedback on the proposals to come in by June 18

 

OUTSOURCING to third-party electricity providers and building 'power parks' - these are among landmark requests which 'big business', believed to include oil giants like Shell and ExxonMobil investing in mega petrochemical complexes here, have made to the authorities regarding their direct electricity supplies now generated by in-house plants.

 

 

Semb Corp looks good in its TA charts. 

 

Acc/Dist and Chaikin uptrending with price cutting the upper bollinger band. shplayer's readings concur with mine. 

 

ten4one,

Thanks....do you by any chance know the amount of S44?....how much per share?

 

shplayer, Tax Credit S44 is an off Balance Sheet item and it is used to frank dividends payouts by Companies (ie Coys need not be taxed on their P&L A/C again). Companies do have an obligation to utilize the balance in the Tax Credit A/C with the IRS and return the cash or in kind (like rt issues etc) to Shareholders. Briefly explained and hope it helps. Cheers! 

 

Breakout from Upper bolly band on good volume.

A/C, Chaikin and RSI on uptrend.

 

ten4one,

Thanks for advice. What is the tax credit...S44?

Yes, looking at Sembmar too.....waiting to vest at the appropriate time.

But, bear in mind, SCI owns 62% of SembMar....so what benefits SembMar will benefit SCI too.

 

 

Personally I think SembMarine is a better buy........very good chance of getting a tax credit windfall and ride on the oilrigs huge book-orders. Cheers!

 

Appreciate current TA readings from experts. Thanks

 

TA charts looking bullish. Acc/Dist and Chaikin on uptrend

 

SYT888,

SCI closed pretty strong on the eve of 1Q 07 announcement.

Hope you are somewhat relieved?

 

EastonBay, rickytan,

No problem. Think SYT888 was concerned about some of her investments.....she asked my opinion and provided me with her cost of purchase (think this was what she wanted to keep confi).

My response to her was not something more or less than I would post on SJ. As usual, I do not make any 'buy' or 'sell' calls.....either on SJ or thru emails....as I believe this should primarily be the decision of the investor.

As for SCI, my response was that 1Q is due on 3 May. My estimate is it will come in at about 8 cts eps (before EI) and FY07 should be about 34 cts.

From KepCorps results, KCI's O&M performed well; also economic data by EDB last week also showed shipbuilding/repair grew 40%... So, I am expecting that SCM should do well (SembCorp Mar - 1Q on 2 May).

SCI's Utilities should also perform well.....besides its growth in Spore, UK and Vietnam, I am looking out for the impact of Fujiarah in its first full Q as an associate (40%) of SCI.

SCI's Environment has seen the worst on 2006....and will be interesting to see if it will begin to take off in 2007.

In short, I have certain expectations from SCI and I am waiting for its 1Q results to evaluate if SCI's performance against my estimates.

 

Hi EastonBay,

I have the same thinking too. I wanted to response when I first read syt888's post but held back. If it is very personal, then of course we can understand :)

 

Hi Shplayer,

We would really appreciate your continued sharing with us. Xie xie, thank you !

 

syt888, I would encourage you to ask shplayer questions on SJ than to send him private emails, so that everyone on the forum can benefit from his wisdom. Shplayer is a high respected figure in SJ and personally I benefitted alot from his posts and answers to questions posted by fellows forumers. So, if it is related to shares and SGX, why not share with everyone?

 

(Ok, I know I do not have any authority over you and it's your freedom to ask in private.)

 

Too sick to buy at $4.80. I believe it will move upward in the short term as it has gone thru 3 wavelets.

 

Hi SHPlayer, Thanks I will email SJ Administrator. Really your kindness and guidance

 

SYT888,

You can send an email to SJ administrator, Ngiam Kee Jang (keejang@sharejunction.com) and ask him to forward your email to me.

As for possibility of post May correction, here again, I do not have a crystal ball. But, suffice to say, if you are into equities, you should always be prepared for market volatilities. Historically, the market is usually quieter after quarterly results reporting season and also fund managers will also be away during summer holidays in Jun - Aug.

FYI...SCM 1Q07 results is due on 2 May.....which should give you a heads up on SCI's performance.

 

Hi SHPlayer, thanks for your patience with me. I bought high ie. why fluatuations in price do affect me. But I am in this counter for long term. Btw, just want to find out can I ask for your email contact so that I can ask you more on other counters? Or I can give you my email. Let me know.

Do you foresee that there will be a May correction/crash this year?

 

SYT888,

I really wish I can predict the market prices....but the truth is I cannot. As in my earlier post to you, I said SCI's price looked stretched at $4.50 but yet it surged to $5.50.

But, if you look at Keppel Corp's 1Q 07 performance announced today, the O&M posted very strong YoY earnings......so this may also reflect on SCM (Sembcorp Marine). Furthermore, I believe SCI's Utilities will also show strong growth and the Environment division has seen the worst in 2006 and should begin to produce results.

For  me, I am looking forward to 3 May for SCI's 1Q 07 result......which I suspect may deliver a pleasant surprise. However, I cannot tell if the market has already priced it in the good news.

My outlook for my core holdings are 'long term'....so I don't let short term market fluctuations influence my investment decisions too much.

 

Hi SHplayer, you have alw been very helpful, do you foresee futher fall in this counter price in the next few days? Thanks.

 

singaporegal,

SCI is my one of my core holdings...so I still have it......divvy was good.....

Am waiting for 1Q result on 3 May to review my position on this counter. No worries, my cost is about $2.00

Thanks