Broker Name: CGS International
Date of Report: June 11, 2026
Excerpt from CGS International report.
Report Summary
- Stock Focus: Sembcorp Industries (SCI SP)
- Action: ADD (reiterate)
- Target Price: S\$7.68 (unchanged)
- Current Price: S\$6.13
- Upside: 25.3%
- Key Idea: Sembcorp Industries completed the acquisition of Alinta Energy, with a one-off acquisition cost of S\$190m in 1H26F. This will be offset by Alinta’s earnings contribution from 2H26F, estimated at S\$115m in FY26F and ramping up to S\$230m-240m per year from FY27F.
- Highlights:
- Rising Singapore electricity prices (USEP) to support higher spark spreads for SCI’s gas portfolio, especially the Senoko portfolio pending recontracting in 2026.
- Defensive earnings profile with cost pass-through mechanisms and further upside from gas portfolio optimisation in a tight market.
- Valuation at 9.5x FY27F P/E is seen as attractive entry point (vs. target 12x P/E).
- Key re-rating catalysts: New power purchase agreements (PPAs) and value unlocking of renewable energy assets in India via IPO or asset recycling.
- Downside risks include prolonged plant shutdowns and regulatory changes.
- Ticker: SCI SP (Reuters: SCIL.SI)
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
