By Phillip Capital

May 31, 2021


 Sustainable solutions portfolio to be 70% of profits by 2025, up from current 40%. Urban business land sales to triple to 500 hectares by then.

 ROE of 10% and gross debt to equity at 1.3x by 2025 from 3.2% and 2.3x respectively.

 We raise our target price to S$2.07 from S$1.77 as we peg SCI to 1.0x FY21 P/B, up from 0.85x previously, as we believe the detailed layout of its five year plan will drive a re-rating of the stock. However, as most positives have been priced in, and its ambition of transforming its portfolio is now new, we downgrade from ACCUMULATE to NEUTRAL. Sembcorp Industries unveiled its strategic plan to transform its portfolio from brown to green, with growth powered by its renewable and integrated urban solutions businesses. It is positioning itself to be a leading pan-Asian provider of sustainable solutions.