Sembcorp Industries (U96) AI Stock Analysis

• Market Cap: S$11.62B
• Dividend Yield: 1.38%
• Average Volume (3M): 4.05M
• Price to Earnings (P/E): 11.4
• 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: 3,182,220
• 30 Day Avg. Volume: 4,047,626
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: S$7.30
• Price Target Upside: 11.83% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 71 Outperform
• Price Target: S$7.50 ▲(14.85% Upside)

Sembcorp Industries' strong profitability and effective equity utilization are key strengths, though high leverage and cash flow management issues present risks. Positive technical indicators and reasonable valuation further support the stock's attractiveness.

Positive Factors

Renewable Energy Expansion

This project enhances Sembcorp's renewable energy portfolio and aligns with global sustainability trends, strengthening its market position in clean energy.

Profitability

Strong profitability and margin improvements indicate efficient operations and potential for sustained earnings growth, supporting long-term financial health.

Equity Utilization

Effective equity utilization suggests that the company is generating substantial returns on its investments, which is a positive indicator of management efficiency.

Negative Factors

Revenue Growth Challenges

Negative revenue growth indicates potential difficulties in expanding sales, which could impact long-term growth prospects if not addressed.

High Leverage

High leverage can increase financial risk and limit flexibility, potentially affecting the company's ability to invest in growth opportunities.

Cash Flow Management

Negative free cash flow highlights liquidity issues and the need for better cash management to ensure financial stability and support operations.

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 through multiple key streams. The primary source of income comes from its energy segment, which involves the generation and sale of electricity, including both conventional and renewable energy sources such as solar and wind. Additionally, the company's water segment contributes to its revenue through the treatment and supply of water to municipalities and industries, as well as the provision of wastewater treatment services. Urban development projects, including industrial parks and integrated townships, also add to Sembcorp's earnings through land sales and leasing. The company engages in strategic partnerships and joint ventures, particularly in overseas markets, to enhance its operational capabilities and expand its customer base. Factors such as the global transition towards sustainable energy, government policies supporting renewable energy, and increasing demand for water resources in urban areas play significant roles in driving Sembcorp's growth and profitability.

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: Positive
• Last Price: 6.53
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• 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 Positive. The current price of 6.53 is above the 20-day moving average (MA) of 6.40, above the 50-day MA of 6.21, and above the 200-day MA of 6.31, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 61.36 is Neutral, neither overbought nor oversold. The STOCH value of 70.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:U96.

Sembcorp Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BS6	―	$13.71B	9.62	30.76%	3.41%	0.42%	40.48%
BEC	―	S$1.14B	11.70	21.22%	4.74%	-13.76%	10.28%
U96	―	S$11.62B	11.45	19.65%	1.38%	-6.69%	6.76%
BN4	―	S$16.40B	16.70	8.75%	3.34%	-0.62%	34.52%
5E2	―	$7.03B	26.34	4.07%	0.69%	25.68%	―
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
S58	―	$5.08B	20.90	9.89%	1.46%	12.54%	332.80%

Sembcorp Industries Corporate Events

Sembcorp Secures Approval for Singapore’s First 24/7 Renewable Energy Import

Sembcorp Utilities, a subsidiary of Sembcorp Industries, along with Sarawak Energy Berhad, has received conditional approval from Singapore’s Energy Market Authority to import 1GW of renewable energy from Sarawak to Singapore. This initiative, expected to begin operations by 2035, marks Singapore’s first large-scale 24/7 power import project, utilizing predominantly hydropower sources certified for sustainability. The project aims to enhance regional energy cooperation and resilience, contributing to the ASEAN Power Grid.