Lim Siew Khee, an analyst from CGS-CIMB, reiterated the Buy rating on Sembcorp Industries (SCRPF – Research Report). The associated price target was raised to S$8.14.
Lim Siew Khee has given his Buy rating due to a combination of factors influencing Sembcorp Industries’ growth prospects. A key element is the company’s strategic move to increase its stake in Senoko Power, which is expected to enhance its operational power capacity significantly. This acquisition is anticipated to contribute positively to Sembcorp’s earnings per share, with a potential increase of 2% to 4% over the next few fiscal years.
Additionally, Sembcorp’s commitment to renewable energy is evident through its recent agreement to develop a floating solar photovoltaic system, further solidifying its position in the renewable energy sector. The company’s valuation appears attractive, trading below the market average, and its projected earnings growth and return on equity are higher than its regional peers. These factors combined with the anticipated catalysts such as capacity expansion and renewable energy contracts underpin Lim Siew Khee’s optimistic outlook on Sembcorp Industries, justifying the Buy rating.
According to TipRanks, Siew Khee is a 4-star analyst with an average return of 7.3% and a 57.89% success rate.