Daily Brief Industrials: Sembcorp Marine, Cosco Shipping Energy Transportation Co. Ltd. (H), Adani Ports & Special Economic Zone, Siemens AG, Boeing Co and more

• The Sembcorp Marine (SMM) EGM is scheduled for 16 February. If approved by shareholders, the Asset Co transaction and completion of the KOM restructuring will be done by 28 February.
• We expect no market trade from FTSE trackers, buying from MSCI trackers, while there is a question mark over treatment in the FTSE Straits Times Index (STI) (STI INDEX). 
• There could be selling in Sembcorp Marine (SMM SP) from active Keppel Corp (KEP SP) shareholders and that could have a bigger impact on the stock.

• Cosco Shipping Energy Transportation (1138 HK) rallied 12.5% in the last two trading days after issuing a FY22 positive profit alert, but we are concerned that momentum is peaking. 
• Its P/B of 0.92x is 4SD above average since 2016, more than sufficient to reflect rebound in FY23-24F profitability. Meanwhile, VLCC rate has plunged 80% in the last 3 months.  
• We believe CSET is already midway in the upcycle which normally lasts for 2-3 years. With high 4Q22 profit difficult to sustain for long, there is downside risk on earnings.  

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Adani Ports & Special Economic Zone

• The investment case revolves around Siemens’ high backlog converting to sales in FY 2023. 
• Demand is driven by the need of customers to digitalize their businesses and reach their sustainability goals, which Siemens can provide given its optimized portfolio
• As per the CEO, Siemens keeps reinventing itself from a position of strength by anticipating new trends and developing new technologies

• Boeing had another weak quarter and failed to meet Wall Street expectations with respect to revenues as well as earnings.
• The company managed over $3 billion in free cash flow driven by the progress in its performance and continued demand.
• Boeing has a strong pipeline of development programs, and it has been preparing itself for the next generation of products.