- We are positive on Sembcorp (SGX:U96)’s recent renewables acquisitions and its long-term power purchase agreement (PPA) with SingTel. We thus raise our FY23-25 earnings forecasts for Sembcorp by 9-11% by taking into account higher margins for recently secured long-term PPAs.
- - Read this at SGinvestors.io -
- Sembcorp remains undervalued as our higher SOTP-based target price of S$6.00 (previously S$4.35) based on 12x (previously 10x) FY24E P/E represents a 10% discount to regional utility peers, which are trading at an average of 13x FY24E P/E.
Sembcorp’s first renewable project in the Middle East
- - Read this at SGinvestors.io -
- We estimate Sembcorp’s investment to be ~S$400m, funded by debt and equity. We also estimate a project ROE of 8-10%, which yields profit of S$10-12m pa, or 1.4-1.7% of Sembcorp’s FY25E earnings.
Signs PPA with SingTel to manage merchant risk
- Read more at SGinvestors.io.
Above is the excerpt from report by Maybank Research.
Clients of Maybank Securities may be the first to access the full report in PDF @ https://www.maybanktrade.com.sg/.
Kelvin Tan Maybank Research | https://www.maybank-ke.com.sg/ 2023-06-09
Read also Maybank's most recent report:
2024-02-21 Sembcorp Industries - Driving Energy Transition; Strong Finish To FY23.
Previous report by Maybank:
2023-08-04 Sembcorp Industries - Strong 1H23 Earnings, Tops Consensus.
Price targets by 4 other brokers at Sembcorp Target Prices.
Listing of research reports at Sembcorp Analyst Reports.
Relevant links:
Sembcorp Share Price History,
Sembcorp Announcements,
Sembcorp Dividends & Corporate Actions,
Sembcorp News Articles
