SG : Sembcorp Industries - 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$460m 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.

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