Sembcorp Industries

[winston]

not vested

Sembcorp Industries says it expects to incur losses for FY2020 in profit guidance

by Felicia Tan

Sembcorp Industries says it expects to incur losses for the FY2020 in its profit guidance released on Dec 7.

The losses are primarily attributable to the non-cash, non-recurring loss of some $1.12 billion following the completion of the distribution in specie of ordinary shares in the capital of Sembcorp Marine (SembMarine) on Sept 11, 2020.

The loss resulted from the fair value of $1.60 billion being lower than the carrying amount of SembMarine’s $2.72 billion as at June 30, 3030.

According to Sembcorp, the loss will be adjusted based on the carrying value of SembMarine shares up to Sept 11, 2020.

The group also announced that there will be impairments of some $89 million in its 2HFY2020 financial statements, arising from its periodic assessment of the recoverable amounts based on expected future cash flows of its assets.

The impairment comprises the $21 million impairment for utilities assets on Jurong Island, an $8 million impairment for a dedicated wastewater treatment plant in Nanjing, China, as well as a $60 million impairment of UK Power Reserve assets.

The group adds that it expects to maintain positive operating cash flow in 2020 due to the underlying profitable performance of its Energy and Urban businesses.

Source: The Edge

https://www.theedgesingapore.com/news/c ... t-guidance

[winston]

not vested

Sembcorp Industries has said it is actively monitoring the developing situation in Myanmar in the wake of the military coup.

On Tuesday, the company provided updates on its two investments in Myanmar.

The first is a 225-megawatt gas-fired power plant in Mandalay, operated through Sembcorp's subsidiary Sembcorp Myingyan Power Company Limited.

The plant commenced full commercial operation in October 2018.

Amid the situation in Myanmar, Sembcorp said the power plant continues to be in operation and added that its employees are safe.

Source: Phillips

[behappyalways]

Sembcorp swings into FY2020 net loss of $997 mil after Sembmarine divestment
https://www.theedgesingapore.com/capita ... divestment

[winston]

not vested

SEMBCORP INDUSTRIES (SCI SP)
Recommendation : HOLD
Fair Value : SGD 1.85

WAITING FOR DETAILS ON PORTFOLIO TRANSFORMATION.

Core net profit of SGD301m in FY20; net loss of SGD997m including discontinued business and exceptional items

Utilities to see changes in customer profile in the UK and Singapore

Transforming portfolio to include more sustainable solutions; details later in May

Sembcorp Industries (SCI) is a leading energy, water and urban development group operating across five continents worldwide.

The Energy segment provides relative stability but we would focusing on the group’s portfolio transformation to include more sustainable solutions (details later in May).

Urban development is another key pillar which has synergies with the Energy/Utilities segment.

With a turnaround due to the de-merger with Sembcorp Marine, SCI will see key financial metrics such as ROE turn for the better but we would be even more encouraged if improvement in the future were to be driven by a fundamental pick-up in the utilities space.

Source: OCBC

[winston]

Sembcorp wins new solar energy project from HDB, becomes leading solar energy provider in Singapore

by Atiqah Mokhtar

For the new project awarded by HDB, Sembcorp will build, own, operate and maintain grid-tied rooftop solar systems across 1,154 HDB blocks and 46 government sites in Singapore.

Sembcorp states that the project will generate enough energy to power 16,000 four-room HDB flats for a year and offset about 32 kilotonnes of carbon emissions annually – equivalent to taking approximately 7,000 cars off the roads.

It is the second project Sembcorp has won under HDB’s SolarNova programme. Currently, Sembcorp already operates solar energy systems across 618 HDB blocks and 26 government sites.

Source: The Edge

https://www.theedgesingapore.com/news/c ... y-provider

[winston]

not vested

Sunny skies

With the latest 60 MWp solar project awarded by HDB and EDB, SCI’s renewable energy portfolio in Singapore strengthened to c.302 MW.

Currently, Solar SCI has a total of c.756 MW of solar power capacity, comprising 302 MW in Singapore and 435 MW in India.

Maintain Add with slightly higher TP of S$1.97 still based on 1x CY21F P/BV.

SCI trades at 0.87x P/BV, cheap vs. regional power/utilities plays’ c.1.6x

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 1E4A527D9A

[winston]

not vested

Sembcorp Industries (SCI SP)
Slowly And Surely Building Up Its Renewables Portfolio

On the renewables front, SCI has had a solid 2021 thus far, winning 82mwp of solar
projects in Singapore and a 400mw utility-scale solar project in Rajasthan, India.

In our view, SCI appears to be well on track to meet its current target of having 4,000mw in renewables capacity by 2022 vs 3,218mw as at end-20.

We highlight that the company may increase its renewables target at its May 21 investor day.

Maintain BUY with a higher target price of S$2.27 (previously S$2.00).

Source: UOBKH

https://research.uobkayhian.com/content ... 3c94f78bb5

[winston]

not vested

HSBC Upgrades SCI to Buy from Hold, raise TP $2.61 vs $1.68.

All eyes on the Investor Day scheduled in May – management likely to announce its renewables ambitions

A mix of good underlying FCF generation and additional debt are the likely sources of support for future growth

We continue to use a SOTP method to value the stock. We now value the energy division at a 2021e EV/EBITDA multiple of 8.0x (earlier 7.0x), which is at a slight premium to the 2021e market cap weighted EV/EBITDA multiple of peers (excluding outliers).

The premium is to acknowledge that SCI is the only Singapore-based energy company listed on STI. We also update our free cash flow generation forecasts for SCI leading to a lower net debt for 2021e. For the urban division, we use the book value (unchanged).

Based on this, we arrive at our revised TP of SGD2.61 (earlier SGD1.68). Our TP implies c36% upside and we upgrade SCI to Buy (from Hold).

At our TP of SGD2.61, the implied 2021 PB multiple for SCI is 1.3x, slightly higher than the peers.

Source: HSBC

[winston]

not vested

SEMBCORP INDUSTRIES (SCI SP)

Recommendation : BUY
Fair Value : SGD 2.50

READYING ITSELF FOR THE FUTURE.

Scope to re-rate further on renewables strategy
For stock to sustain higher valuations, execution of strategy is critical
Transforming portfolio to include more sustainable solutions; details later in May

Sembcorp Industries (SCI) is a leading energy, water and urban development group operating across five continents worldwide.

The Energy segment provides relative stability but it has also been impacted by Covid-19.

Urban development is another key pillar which has synergies with the Energy/Utilities segment.

With a turnaround due to the de-merger with Sembcorp Marine, SCI will see key financial metrics such as ROE turn for the better, but we would be even more encouraged if improvement in the future were to be driven by a fundamental pick-up in the utilities space.

Successful execution of renewables strategy provides further scope for re-rating.

Source: OCBC

[winston]

not vested

Renewables proxy in Singapore

SCI aims to grow renewable energy profit by 30% (5-year CAGR) by 2025F from
S$46m in FY2020. ROE target: 10%. No more investment in coal power.

The group targets to grow its renewable energy installed capacity to 10GW
from current 2.6GW. The target is higher than Philippines peer ACEN (5GW).

We are positive on SCI’s renewables commitment, but execution is key.
Assuming a blue-sky scenario, SCI’s profit could reach S$397m by FY25F.

We now value SCI based on 15x FY22F P/E, in line with Asian peers, to
derive a higher TP of S$2.43. Reiterate Add.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 57665012e1