Broker Name: CGS International
Date of Report: December 12, 2025
Excerpt from CGS International report.
- Sembcorp Industries (SCI) is acquiring Alinta Energy in Australia for A\$5.6bn, adding 3.4GW of generation capacity and a 10.4GW renewables pipeline, funded by cash and a bridging loan with no equity issuance required.
- The deal is expected to be earnings accretive, pushing up pro-forma EPS and ROE, but raises group net debt/EBITDA from 3.6x to 4.6x, with SCI aiming to maintain dividends and deleverage over time.
- SCI continues to target strong renewable energy growth, aiming for 25GW gross installed renewables by 2028 and a halving of emissions intensity, while coal will make up less than 5% of proforma revenue.
- Despite the high acquisition P/E, the report maintains an “Add” rating with a target price cut to S\$7.77, noting that SCI’s valuations remain undemanding, with downside risks from regulatory changes.
- SCI has received respectable ESG scores and is on track with decarbonisation targets, targeting net-zero by 2050 and positioning itself as a leading renewable energy player in ASEAN.
Report Summary:
- SCI’s acquisition of Alinta Energy accelerates renewable capacity growth and is expected to be earnings accretive, with manageable impact on balance sheet and dividends.
- The group is committed to ESG and decarbonisation, and despite near-term gearing concerns, is well-positioned for long-term growth in renewables and shareholder value.
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
