- At its Investor Day, Sembcorp Industries (SGX:U96) presented its 2028F target to reach 25GW gross renewable energy (RE) installed capacity, up from the current level of 8.7GW.
Renewable Energy installed capacity to nearly triple by 2028F
- - Read this at SGinvestors.io -
- With a target ~50% mix for solar, Sembcorp implies it will need to add ~7.8GW of capacity through solar projects by 2028F.
- New renewable energy capacity is expected to primarily come from projects in India, Singapore, Vietnam, Indonesia, the UK and the Middle East, thus reducing its portfolio exposure to China from 62% as of 30 Sep 2023 to ~45%.
- - Read this at SGinvestors.io -
S$14bn investment plan
- Of the S$14bn Sembcorp plans to invest over 2024-28F, S$10.5bn would be directed towards building renewable energy capacity. Other areas of investment are decarbonisation solutions, including renewable energy imports (S$1.4bn) and integrated urban solutions (S$0.7bn).
- Sembcorp intends to fund these investments through operating cash flows (50%), project debt (30%), corporate debt (10%) and capital recycling (10%).
- Management’s estimate of ~S$1.8bn p.a. of operational cash flows (including interest expenses) is supported by a stable income stream coming from a 97% contracted gas portfolio (52% long-term contracts of more than 5 years).
ROE impact
- Read more at SGinvestors.io.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2023-11-07
Previous report by CGS-CIMB:
2023-08-07 Sembcorp Industries - Strive Towards Stability.
Price targets by 5 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
