{"id":17077,"date":"2024-05-03T07:00:24","date_gmt":"2024-05-02T23:00:24","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=17077"},"modified":"2026-06-08T22:43:41","modified_gmt":"2026-06-08T14:43:41","slug":"sembcorp-industries-driving-energy-transition","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hans\/sembcorp-industries-driving-energy-transition\/","title":{"rendered":"Sembcorp Industries &#8211; Driving energy transition"},"content":{"rendered":"<p><em>Excerpts from Maybank report<\/em><\/p>\n<h2>Sembcorp Industries (SGX: U96)<\/h2>\n<ul>\n<li>Sembcorp Industries (SCI) reported FY23 net profit of SGD970m, +11% and marginally ahead of MIBG\/street. 2H profit of SGD426m grew 15% YoY.<\/li>\n<li>Revenue for 2H fell 14% YoY due to lower power prices; this was partly offset by higher revenue from renewable and other business segments.<\/li>\n<li>Bottom-line growth was driven by higher EBITDA across conventional energy and renewables. Renewables capacity is halfway towards its 2028 target of 25GW.<\/li>\n<li>While near-term earnings have likely peaked, the green transition theme is intact with a de-risked revenue profile.<\/li>\n<\/ul>\n<p>We reiterate BUY with an unchanged SOTP-based TP of SGD6.30.<\/p>\n<h2>Continued growth for renewables segment<\/h2>\n<p>Net profit before EI for the renewables segment grew 42% to SGD200m, from SGD141m in FY22, driven by contributions from acquisitions in China and India, as well as higher contributions from energy storage and solar operations in Singapore.<\/p>\n<p>FY revenue from renewables grew 40% YoY to SGD703m while segment adjusted EBITDA grew 45% YoY to SGD601m.<\/p>\n<p>Over the year, SCI secured 4GW of gross renewables capacity through organic growth and M&amp;As, bringing group\u2019s renewable capacity to 13.8GW, at 55% of its 2025 target of 25GW.<\/p>\n<p>Integrated Urban Solutions revenue fell 6% YoY to SGD418m due to cessation of a public waste collection contract.<\/p>\n<h2>Receding tailwind of elevated power prices<\/h2>\n<p>Net profit before EI for conventional energy increased 30% to SGD809m in FY23 from SGD622m in FY22 driven by higher power prices. However, 2H saw a slowdown in revenue as power prices came off the peaks sequentially.<\/p>\n<p>During the year, SCI secured multiple PPAs for Singapore generation assets, enhancing earnings certainty. 62% of the group\u2019s conventional generation capacity has more than 5 years\u2019 contract tenure.<\/p>\n<h2>Likely near-term earnings peak, green theme intact<\/h2>\n<p>End of term of operation of Phu My 3 power plant in Vietnam (c. SGD10m profit impact), maintenance downtime of 2 months for Singapore cogen (c.50m of profit impact), lower power prices and higher funding cost should weigh on FY24 earnings.<\/p>\n<h2>Valuation\/Recommendation<\/h2>\n<p>SCI\u2019s de-risked revenue profile (lower merchant risk, long-term PPAs) and ongoing green transition keeps us on BUY with relatively unchanged earnings estimate and TP of SGD6.30.<\/p>\n<figure id=\"attachment_17079\" aria-describedby=\"caption-attachment-17079\" style=\"width: 1512px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/05\/Sembcorp-Industries.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-17079 size-full\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/05\/Sembcorp-Industries.jpg\" alt=\"Sembcorp Industries share price chart\" width=\"1512\" height=\"457\" \/><\/a><figcaption id=\"caption-attachment-17079\" class=\"wp-caption-text\">Sembcorp Industries share price chart<\/figcaption><\/figure>\n<p>You can find the full report <a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/05\/Sembcorp.pdf\"><em>here<\/em><\/a>\u00a0and the company website <em><a href=\"https:\/\/www.sembcorp.com\/news-and-insights\/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">here<\/a><\/em>.<\/p>\n<p>[thrive_leads id=&#8217;15712&#8242;]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Excerpts from Maybank report Sembcorp Industries (SGX: U96) Sembcorp Industries (SCI) reported FY23 net profit of SGD970m, +11% and marginally ahead of MIBG\/street. 2H profit of SGD426m grew 15% YoY. Revenue for 2H fell 14% YoY due to lower power prices; this was partly offset by higher revenue from renewable and other business segments. Bottom-line [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":17080,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[3051,3057],"tags":[881,1331,1715,1943,2792,2793,2794],"class_list":["post-17077","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-singapore","category-manufacturing-mining-supply-chains-singapore","tag-singapore-stocks","tag-singapore-stocks-to-buy","tag-sembcorp-industries","tag-singapore-stocks-ideas","tag-renewable-stocks","tag-conglomerate-stocks","tag-energy-transition-stocks"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17077","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/comments?post=17077"}],"version-history":[{"count":4,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17077\/revisions"}],"predecessor-version":[{"id":17084,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17077\/revisions\/17084"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media\/17080"}],"wp:attachment":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media?parent=17077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/categories?post=17077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/tags?post=17077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}