Sembcorp Industries Intrinsic Value Calculation – CGS-CIMB Raises Sembcorp Industries Target Price to $6.20, Maintains ‘Add’ Rating

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Following the announcement of potential divestments, CGS-CIMB Research analysts Lim Siew Khee and Izabella Tan have maintained their “add” rating on Sembcorp Industries ($SGX:U96) and have raised the target price to $6.20. This ‘add’ rating suggests that investors may benefit from investing in Sembcorp Industries. The analysts are positive about the company’s potential growth prospects. In particular, they believe that the company’s long-term investments in renewable energy sources, such as solar and wind power, will provide a stable source of income in the future.

Furthermore, they also noted that Sembcorp Industries’ strong balance sheet and cash flow should help the company navigate any potential headwinds in its core businesses. Overall, with its strong fundamentals and the potential divestment plans, analysts recommend investors to take advantage of this opportunity to invest in Sembcorp Industries. With the current market conditions, investors may benefit from holding a long-term view and potentially purchase Sembcorp Industries to benefit from its growth prospects in the future.

Market Price

On Wednesday, Sembcorp Industries saw its stock open at SG$5.3 before closing at the same price, yielding a minor 1.1% decline from the previous closing price of SG$5.4. However, CGS-CIMB raised the company’s target price to SG$6.20 while maintaining its ‘Add’ rating for the stock. In light of this, investors should keep an eye on this stock as it could offer attractive returns in the near future. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Sembcorp Industries. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Sembcorp Industries. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Sembcorp Industries. More…

Key Ratios Snapshot

Some of the financial key ratios for Sembcorp Industries are shown below. More…

Analysis – Sembcorp Industries Intrinsic Value Calculation

At GoodWhale, we have taken a deep look into the financials of SEMBCORP INDUSTRIES and come to the conclusion that their fair value is around SG$2.5. This is based on our proprietary Valuation Line, which takes into account the company’s fundamentals such as earnings, dividends and cash flow. Currently, SEMBCORP INDUSTRIES stock is trading at SG$5.3, which is overvalued by 112.0%. Therefore, this presents an opportunity for savvy investors to take advantage of the current overvaluation and buy the share at a discount. More…

Peers

Sembcorp Industries Ltd is one of the leading energy, water and marine companies in the world. As a Singapore-based conglomerate, it is engaged in a wide range of businesses across the energy, water, waste, industrial and marine sectors. Its competitors include Endur ASA, Mytilineos SA and Fitters Diversified Bhd, all of which are well-recognized international companies in their respective sectors.

– Endur ASA ($LTS:0JGO)

Endur ASA is a Norwegian energy company that specializes in crude oil and derivatives trading. The company has a market capitalization of 962.36M as of 2022 and a Return on Equity (ROE) of 5.71%. Endur ASA’s large market capitalization reflects its ability to successfully convert a strong portfolio of energy investments into significant returns. The company’s ROE of 5.71% indicates its ability to generate profits from its equity investments, showing that the company is a financially sound investment.

– Mytilineos SA ($OTCPK:MYTHY)

Mytilineos SA is a Greek industrial and energy company with a focus on energy, metal and engineering. It is one of the largest diversified energy companies in Greece, with operations in the fields of electricity, natural gas, renewables, aluminium and construction. With a market cap of 2.91B as of 2022, Mytilineos SA is one of the top companies in Greece. Additionally, Mytilineos SA has a very impressive return on equity (ROE) of 14.63%, which is significantly higher than the industry average. This indicates that the company is able to generate more profit from its assets compared to other companies in the same industry.

– Fitters Diversified Bhd ($KLSE:9318)

Fitters Diversified Berhad is a Malaysian-based conglomerate that is engaged in various businesses ranging from manufacturing to property development. The company has a market capitalization of 66.88 million as of 2022 and a Return on Equity of -2.15%. Market capitalization is the total value of the company’s outstanding shares, while Return on Equity measures how effectively the company is using its shareholders’ equity to generate returns. The company’s negative ROE indicates that it is not efficiently utilizing its resources to generate profits.

Summary

Investing analysis of Sembcorp Industries has been positive according to CGS-CIMB Research analysts Lim Siew Khee and Izabella Tan. They have maintained their “add” rating and raised the target price to $6.20 following news of potential divestments. The analysts believe that these divestments could enable the company to unlock value for investors, and bode well for the company’s future growth prospects. Furthermore, the analysts are positive about Sembcorp Industries’ increased focus on its core businesses, which are expected to provide further improvement in performance going forward.