Broker Name: CGS International
Date of Report: March 17, 2026
Excerpt from CGS International report.
- Report Summary:
- Sembcorp Industries (SCI) is well protected from global gas shocks due to its long-term power contracts and piped natural gas (PNG) import agreements, with low risk to supply and potential upside if global tensions persist.
- The acquisition of Alinta Energy will raise leverage, but management expects manageable net debt and plans to gradually increase dividend payout ratio towards 60-70%.
- SCI is pursuing new power purchase agreements and value unlocking via IPO/asset recycling, positioning it as a top pick in Singapore with undemanding valuation and higher dividend potential.
- Renewable energy (RE) curtailment in China remains elevated due to grid constraints, but a large investment plan by State Grid Corporation is expected to ease bottlenecks over time.
- SCI’s ESG strategy is improving, with progress in decarbonisation targets and emissions reductions; it aims for net-zero by 2050 and continues expanding RE capacity in ASEAN.
- Financial forecasts show revenue growth and higher EBITDA margins in 2026-2028, with robust cashflow and equity growth expected.
- Peer comparison shows SCI offers competitive returns, robust ROE, and attractive dividend yields relative to regional renewable energy and utilities companies.
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
