Broker Name: CGS International
Date of Report: December 12, 2025
Excerpt from CGS International report.
- Sembcorp Industries (SCI) is acquiring Australian Alinta Energy for A\$5.6bn, adding 3.4GW of power capacity and a future development pipeline of 10.4GW in renewables, with no equity fundraising required.
- The acquisition will increase SCI’s earnings and renewable energy profile, but introduces some coal exposure (<5% of revenue); SCI maintains its dividend and aims to grow renewables to 25GW by 2028, targeting halved emissions and improved ESG scores.
Report Summary:
- SCI’s acquisition of Alinta Energy is earnings accretive, though priced at a steep 21x historic P/E. The deal is fully funded via cash and bridging loans, avoiding equity dilution.
- Alinta brings 3.4GW of mostly gas, coal, wind, solar, and battery projects, plus a significant renewables pipeline; SCI expects strong cash generation and plans to deleverage over time.
- Coal exposure remains minimal (<5% of group revenue) and is balanced against SCI’s aggressive renewables growth and decarbonisation targets.
- SCI’s FY25 dividend guidance is unchanged, and the company is on track to halve emissions and boost renewables investment by 2028.
- Key risks include market acceptance of coal exposure, regulatory changes, and operational challenges; upside could come from an India RE IPO.
- SCI’s ESG ratings are improving, and the company is positioning itself as a leading renewable energy player in Asia-Pacific.
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.cgs-cimb.com/
