Broker: CGS International
Date of Report: December 12, 2025
Excerpt from CGS International report.
Report Summary
- Sembcorp Industries (SCI) is acquiring Alinta Energy in Australia for A\$5.6bn, expanding its power generation capacity by 3.4GW and adding a future development pipeline of 10.4GW, mainly in renewables.
- The deal is earnings accretive, with SCI’s pro forma net profit set to rise 14%, but increases group gearing; no equity fundraising is required and dividend payout is expected to be maintained or increased.
- SCI’s strategy focuses on decarbonization, aiming to reach 25GW renewable capacity and halve emissions intensity by 2028, despite minor coal exposure (less than 5% of revenue) from the acquisition.
- Market may take time to accept the coal addition, but SCI is seen as a leading renewable energy proxy in Singapore and ASEAN, with ongoing improvements in ESG ratings and ambitious financial/operational targets.
- The report maintains an “Add” rating for SCI, with a revised target price of S\$7.77 (upside of 33.4% from current price), supported by undemanding valuations and expected re-rating catalysts such as an India RE IPO.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgsi.com
