Maintain HOLD on Sembcorp (SGX:U96) despite reasonable valuation (10.4x FY27 P/E).
Factoring in one-off integration costs for Alinta Energy, we lower FY26 and FY27 PATMI by 33.5% and 7.4%, respectively. FY26 core PATMI remains stable at S$1b.
Weaker top line offset by acquisitions
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Sembcorp raised dividend to 25 cents from 23 cents a year ago. While the group is positioning itself well to create long-term shareholder value, near-term earnings are likely to consolidate from lower spreads and integration costs related to Alinta Energy.
Stable performance from M&A and urban solutions
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Revenue from renewables rose 15% from newly commissioned projects and a full-year contribution from the Vietnam acquisition.
Revenue from integrated urban solutions fell 44% due to the divestment of SembEnviro.
Net profit remained relatively stable at S$984m (-3% y-o-y) due to an increase in contributions from associates and JVs, primarily due to the contribution from Senoko and fair value gains in the urban business.
Factoring in Alinta Energy
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Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
