Sembcorp Industries (SCRPF – Research Report), the Industrials sector company, was revisited by a Wall Street analyst on March 14. Analyst Lim Siew Khee from CGS-CIMB reiterated a Buy rating on the stock and has a S$7.81 price target.
Lim Siew Khee has given his Buy rating due to a combination of factors that highlight Sembcorp Industries’ robust position and future growth potential. The termination of a gas sales agreement with West Natuna is expected to have minimal impact on the company, as Sembcorp Industries has a substantial gas portfolio capable of supporting its current and future projects. This portfolio is projected to power significant electricity generation, ensuring stability and growth in their energy operations.
Moreover, the company’s guidance for a 5% compound annual growth rate in profits from gas and related services remains unaffected, indicating strong financial health. Despite potential risks from regulatory changes in Vietnam, the impact on Sembcorp’s renewable energy portfolio is expected to be minimal. The company’s strategic focus on expanding its renewable energy market share and potential for double-digit earnings growth further supports the Buy recommendation. Key catalysts include capacity expansion, accelerated acquisitions, and securing renewable energy contracts, which are expected to drive future performance.
In another report released on March 4, Citi also maintained a Buy rating on the stock with a S$6.86 price target.