Sembcorp Industries (U96) AI Stock Analysis

• Market Cap: $11.09B
• Dividend Yield: 1.44%
• Average Volume (3M): 4.29M
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.67
• Revenue Growth: -6.69%
• EPS Growth: 6.76%
• Country: SG
• Employees: 5,347
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): 0.11
• Shares Outstanding: 1,780,465,300
• 10 Day Avg. Volume: 4,822,290
• 30 Day Avg. Volume: 4,294,153
• PEG Ratio: 1.29
• Price to Book (P/B): 1.83
• Price to Sales (P/S): 1.53
• P/FCF Ratio: -50.19
• Enterprise Value/Market Cap: 1.86
• Enterprise Value/Revenue: 3.35
• Enterprise Value/Gross Profit: 13.95
• Enterprise Value/Ebitda: 10.04
• 1Y Price Target: $7.31
• Price Target Upside: 17.35% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 70 Outperform
• Price Target: S$7.00 ▲(12.36% Upside)

Sembcorp Industries' overall stock score is driven by a solid financial performance with strong operational metrics, despite challenges in revenue growth and leverage. Technical analysis indicates stable market conditions, and the valuation suggests the stock is reasonably priced. The absence of earnings call data and corporate events does not impact the score.

Positive Factors

Strong EBITDA Margins

Strong EBITDA margins indicate efficient operations and the ability to generate cash from core activities, supporting long-term profitability.

Improved Equity Returns

Improved ROE reflects effective use of shareholders' equity, enhancing investor confidence and potential for sustainable growth.

Healthy Operating Cash Flow

Strong operating cash flow ensures liquidity and supports ongoing operations, providing a buffer against market fluctuations.

Negative Factors

High Leverage

High leverage can increase financial risk, especially in volatile markets, potentially limiting the company's ability to invest in growth.

Negative Free Cash Flow

Negative free cash flow may restrict the company's ability to fund new projects or return capital to shareholders, impacting long-term growth.

Revenue Growth Challenges

Declining revenue growth indicates potential difficulties in market expansion or product demand, affecting future earnings potential.

Sembcorp Industries Business Overview & Revenue Model

Company Description

Sembcorp Industries Ltd, an investment holding company, engages in the renewables, integrated urban solutions, conventional energy, and other businesses in Singapore, rest of southeast Asia, the Middle East, China, India, the United Kingdom, and internationally. The Renewables segment provides electricity from solar and wind resources and energy storage solutions, as well as system services that support integration of renewables into grid; and trades in energy attribute certificates. This segment also includes the development and provision of installation, operation, and maintenance of solar, wind, and energy storage assets. The Integrated Urban Solutions segment develops large-scale integrated urban and integrated townships, such as industrial parks, business, commercial and residential spaces, and production and reclamation of water and industrial wastewater treatment, as well as solid waste management and waste-to-resource solutions. This segment also comprises carbon capture, utilization, and storage projects. The Conventional Energy segment sells energy molecules, including natural gas, steam, and electricity from various fossil fuels, such as natural gas and coal. This segment also sells water products from its integrated assets. The company also engages in the terminalling and storage of petroleum products and chemicals; solid waste management, public cleaning, and recycling services; and construction and engineering related activities. In addition, it offers water products; and reclamation of water and industrial wastewater treatment services. The company was formerly known as Minaret Limited and changed its name to Sembcorp Industries Ltd in July 1998. Sembcorp Industries Ltd was incorporated in 1998 and is headquartered in Singapore.

How the Company Makes Money

Sembcorp Industries generates revenue primarily through its energy and utilities segment, which includes the generation and sale of electricity and the provision of water and waste management services. The company operates power plants that produce electricity, selling it to both commercial and industrial customers as well as to the grid. Water treatment services, including desalination and wastewater management, also contribute significantly to revenue, catering to both municipal and industrial clients. Additionally, Sembcorp engages in urban development projects and partnerships, which provide a steady income stream through long-term contracts. The company's focus on sustainability and renewable energy solutions aligns with global trends, allowing it to capitalize on the increasing demand for cleaner energy sources. Key partnerships with governments and private sector entities further enhance its revenue potential, as they often lead to large-scale projects and investments.

Sembcorp Industries Financial Statement Overview

Summary

Sembcorp Industries shows solid operational performance with strong EBITDA margins and improved equity returns. However, challenges with revenue growth and high leverage could impact financial flexibility. Cash flow management requires attention, particularly in addressing the negative free cash flow.

Income Statement

Sembcorp Industries' income statement shows a mixed performance. The gross profit margin has improved over time, indicating effective cost management. However, the net profit margin for 2024 decreased slightly compared to 2023. Revenue growth has seen fluctuations, with a decline in 2024 compared to 2023, indicating potential challenges in sustaining top-line growth. The absence of EBIT in 2024 may affect operating efficiency assessments. Despite these challenges, EBITDA margin remains robust, suggesting strong operational cash generation.

Balance Sheet

The balance sheet reflects a stable yet leveraged financial position. The debt-to-equity ratio is high, indicating significant leverage which could pose risks in volatile markets. Return on Equity (ROE) has improved, suggesting better profitability from equity investments. The equity ratio indicates a moderate level of financial stability. Overall, while there is improvement in equity returns, high leverage remains a concern.

Cash Flow

Cash flow analysis reveals challenges in free cash flow generation, with a notable decline in 2024. The operating cash flow to net income ratio is healthy, indicating good cash conversion from earnings. However, the free cash flow to net income ratio has turned negative, signaling potential liquidity constraints. While operating cash flows are strong, the decline in free cash flow suggests a need for careful capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.15B	6.42B	7.04B	7.83B	6.41B	5.45B
Gross Profit	1.48B	1.50B	1.57B	1.23B	819.00M	856.00M
EBITDA	2.06B	2.07B	1.83B	1.29B	677.00M	897.00M
Net Income	1.01B	1.01B	942.00M	848.00M	279.00M	-1.01B
Balance Sheet
Total Assets	17.51B	18.18B	15.50B	16.02B	14.39B	13.56B
Cash, Cash Equivalents and Short-Term Investments	993.00M	985.00M	830.00M	1.29B	1.43B	1.19B
Total Debt	8.97B	9.40B	7.56B	7.36B	7.65B	7.95B
Total Liabilities	11.99B	12.52B	10.63B	11.80B	10.48B	10.09B
Stockholders Equity	5.21B	5.36B	4.59B	3.98B	3.77B	3.34B
Cash Flow
Free Cash Flow	95.00M	-196.00M	645.00M	1.04B	929.00M	158.00M
Operating Cash Flow	1.57B	1.41B	1.48B	1.65B	1.22B	491.00M
Investing Cash Flow	-922.00M	-1.44B	-878.00M	-1.39B	-100.00M	-1.28B
Financing Cash Flow	-653.00M	154.00M	-1.10B	-203.00M	-855.00M	55.00M

Sembcorp Industries Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.23
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:U96, the sentiment is Negative. The current price of 6.23 is above the 20-day moving average (MA) of 6.20, above the 50-day MA of 6.15, and below the 200-day MA of 6.26, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 48.80 is Neutral, neither overbought nor oversold. The STOCH value of 31.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SG:U96.

Sembcorp Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BN4	75 Outperform	S$16.40B	16.70	8.75%	3.63%	-0.62%	34.52%
BS6	74 Outperform	$12.56B	8.82	30.76%	3.77%	0.42%	40.48%
BEC	74 Outperform	S$1.14B	11.70	21.22%	4.83%	-13.76%	10.28%
U96	70 Outperform	$11.09B	10.92	19.65%	1.44%	-6.69%	6.76%
5E2	67 Neutral	$7.03B	26.34	4.07%	0.73%	25.68%	―
S58	65 Neutral	$5.01B	20.60	9.89%	1.48%	12.54%	332.80%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Sembcorp Industries Corporate Events

Sembcorp Financial Services Issues S$300 Million Notes

Sembcorp Industries Ltd’s subsidiary, Sembcorp Financial Services Pte. Ltd., has successfully issued S$300 million in fixed rate guaranteed notes under its S$5 billion Euro Medium Term Note Programme. The notes, which are due in 2046, have received approval for listing on the Singapore Exchange, marking a significant step in Sembcorp’s financial strategy and enhancing its market position.

The most recent analyst rating on (SG:U96) stock is a Buy with a S$7.49 price target. To see the full list of analyst forecasts on Sembcorp Industries stock, see the SG:U96 Stock Forecast page.

Sembcorp’s Vietnam Hydropower Acquisition Faces Delay

Sembcorp Industries has announced a delay in the completion of its acquisition of a 49MW hydropower asset in Vietnam, pending government approvals expected by the end of 2025. The company emphasizes its cautious approach to new investments in Vietnam due to regulatory uncertainties, which could impact its operations and stakeholder interests.

The most recent analyst rating on (SG:U96) stock is a Buy with a S$7.49 price target. To see the full list of analyst forecasts on Sembcorp Industries stock, see the SG:U96 Stock Forecast page.

Sembcorp Industries’ Subsidiary Issues S$300 Million in Notes

Sembcorp Industries Ltd announced that its subsidiary, Sembcorp Financial Services Pte. Ltd., has successfully priced S$300 million in fixed rate guaranteed notes due 2046 under its S$5 billion Euro Medium Term Note Programme. This issuance marks the longest-tenured unrated corporate bonds by a Singapore company recently and was nearly seven times oversubscribed, reflecting strong investor confidence. The proceeds will be used for general corporate purposes and working capital requirements of Sembcorp and its subsidiaries, with the payment obligations guaranteed by Sembcorp Industries.

The most recent analyst rating on (SG:U96) stock is a Buy with a S$6.95 price target. To see the full list of analyst forecasts on Sembcorp Industries stock, see the SG:U96 Stock Forecast page.

Sembcorp Secures First Round-the-Clock Power Project in India

Sembcorp Industries, through its subsidiary Sembcorp Green Infra Private Limited, has secured its first 50MW Round-the-Clock power project in India from the Solar Energy Corporation of India Ltd. This project, part of a larger 1.2GW tender, will integrate solar, wind, and battery storage to provide continuous renewable energy. The project is expected to enhance Sembcorp’s renewables capacity in India to over 6.5GW and is set to be operational within 24 months of signing a 25-year power purchase agreement. Although the project will not significantly impact Sembcorp’s financial metrics for 2025, it marks a strategic expansion in their renewable energy capabilities.

The most recent analyst rating on (SG:U96) stock is a Buy with a S$7.49 price target. To see the full list of analyst forecasts on Sembcorp Industries stock, see the SG:U96 Stock Forecast page.

Sembcorp Expands Solar-Energy Storage Projects in India

Sembcorp Industries has secured a 150MW solar power project with a 300MWh Battery Energy Storage System in India, marking its second solar-energy storage hybrid project in the country. This project, part of SJVN Limited’s larger tender, will enhance Sembcorp’s renewables capacity in India to 6.3GW. Although the project will not materially impact Sembcorp’s financials for 2025, it signifies the company’s ongoing commitment to expanding its renewable energy footprint.

The most recent analyst rating on (SG:U96) stock is a Buy with a S$7.49 price target. To see the full list of analyst forecasts on Sembcorp Industries stock, see the SG:U96 Stock Forecast page.

Sembcorp Settles Legal Dispute with Universal Terminal

Sembcorp Industries has announced that its subsidiary, Sembcorp Cogen Pte Ltd, has reached a settlement agreement with Universal Terminal (S) Pte. Ltd. and UT Singapore Services Pte. Ltd. regarding a legal suit over gasoil claims. The settlement, whose terms remain confidential, concludes the legal proceedings without any admission of liability and is not expected to materially impact Sembcorp’s financial performance for the year ending December 31, 2025.

The most recent analyst rating on (SG:U96) stock is a Buy with a S$7.49 price target. To see the full list of analyst forecasts on Sembcorp Industries stock, see the SG:U96 Stock Forecast page.

Sembcorp Industries Focuses on Sustainable Growth at Annual Meeting

Sembcorp Industries recently held its twenty-seventh annual general meeting, where key executives and board members gathered to discuss the company’s strategic direction. The meeting underscored Sembcorp’s commitment to sustainable growth and innovation in the energy and urban sectors, which is expected to enhance its market position and benefit stakeholders.

The most recent analyst rating on (SG:U96) stock is a Buy with a S$7.49 price target. To see the full list of analyst forecasts on Sembcorp Industries stock, see the SG:U96 Stock Forecast page.

Sembcorp and Aster Forge S$650 Million Energy Partnership in Southeast Asia

Sembcorp Industries and Aster Chemicals and Energy have signed deals worth over S$650 million to advance energy and utilities projects in Southeast Asia. The partnership includes a comprehensive suite of solutions for Aster’s facilities and a Memorandum of Understanding to explore strategic initiatives in the region, aligning with their vision for sustainable growth and energy demands.