- Sembcorp (SGX:U96) posted FY22 net profit of S$848m (+204% y-o-y) exceeding MIBG and consensus estimates at 101%/102%, respectively. The Conventional Energy segment drove higher earnings on the back of elevated tariff prices in SG and UK, while increased operational capacity in the Renewable Energy segment also contributed.
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- We roll forward our valuation to FY24E. Reiterate BUY call on Sembcorp with a raised SOTP-based target price of S$4.35 (from S$4.00) representing 16% upside.
Renewables exceeded expectation
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- Sembcorp secured 3.7GW of renewables capacity in FY22 through acquisitions and organic growth across key markets, bringing the group’s renewables capacity1 to 9.8GW.
- Sembcorp’s sustainable solution have expanded by CAGR of 35% over the last 2 years, we believe that this could potentially accelerate to grow over 40% y-o-y in FY23E, reflecting full-year contributions from renewable energy acquisitions in FY22.
Conventional Energy boosted by surging prices
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