Sembcorp Industries: Strategic Growth and Leadership in Asia’s Energy Transition Justifies Buy Rating

UOB Kay Hian analyst Adrian Loh maintained a Buy rating on Sembcorp Industries (SCRPF – Research Report) on June 6 and set a price target of S$8.00.

Adrian Loh has given his Buy rating due to a combination of factors that highlight Sembcorp Industries’ strategic growth and strong positioning in the energy sector. The company has been actively expanding and realigning its operations, focusing on decarbonization and renewable energy, which positions it as a leader in Asia’s energy transition. Despite challenges, such as a maintenance shutdown at its Sakra plant, Sembcorp’s recent financial results have exceeded expectations, showcasing its resilience and effective execution.
Furthermore, Sembcorp’s acquisition of a significant stake in Lion Power, which owns a majority of Senoko Energy, strengthens its influence in Singapore’s power market. The company’s long-term power purchase agreement with Malkoha for its floating solar project and its substantial contracts to supply gas, power, and utilities to Aster Chemicals highlight its commitment to sustainable energy solutions and reinforce its revenue visibility. These strategic moves underscore Sembcorp’s potential for growth and its pivotal role in the region’s energy landscape, justifying the Buy rating.

In another report released on May 30, Macquarie also maintained a Buy rating on the stock with a S$7.15 price target.