🔻On the back of releasing its second half 2025 results in a pre-market announcement this morning, $Sembcorp Ind(U96.SI)$ (SCI) is currently trading down 1.9% to $6.17 as of 926AM
〰The stock has been trading in a tight range between $6 to $6.50 since August 2025
📝Macquarie Research (MQ) however, believes that SCI’s results are better than expected, and that the shares may react positively.
👀Read more for the full article containing excerpts of MQ’s report published this morning on 25 February 2026:
What’s new
Sembcorp Industries (SCI) released its 2H25 results this morning before market open
Why it matters2H25 results. Clean PATMI was S$512 million (-2% year on year) and compares to MQ / Visible Alpha (VA) consensus estimates of S$454 million / S$456 million. The clean PATMI excludes the impact of S$59 million in DPN FX losses, and net loss S$5m in one-offs. Final dividend of 16 cents declared, ahead of MQ / VA estimates of 14 cents / 15 cents.
What MQ liked. Gas and Related Services (GRS) did better than expected at S$371 million (-5% year on year, +12% half on half) versus MQ’s expectation of S$341 million. On a FY25 basis, the SG segment was stable (-1.5% YoY), while Rest of World was weaker (-10% year on year). Integrated Urban Solutions was also better, driven by higher Urban, albeit including FV gains on VSIP and WSIP investments.
What could have been better. Renewables continues to face headwinds. China continues to be a pain point, with FY25 net profit down to S$74m (-17% year on year) on higher curtailment and tariff pressure. India appears to be doing well on better wind resources and newly commissioned projects in Singapore and India. There was an impairment of the rooftop solar assets as the group exited the consumer & industrial rooftop solar business in SEAsia.
Outlook: For GRS, 2026 will see 5% of SCI's Sembcorp portfolio and approximately 50% of Senoko Energy's portfolio to be recontracted, likely at reduced margins
What nowMQ thinks SCI shares will react positively to the better-than-expected results, albeit tempered by the weaker GRS recontracting outlook. MQ has an Outperform rating on SCI shares with a 12-month target price of $6.59 based on a Sum of Parts stock methodology.
Note:Macquarie Research is independent from the Warrants business, what the Macquarie Warrants desks quote from Macquarie Research may not reflect the complete analysis of Macquarie Research on the relevant company over time.
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Macquarie has two SCI call warrants that are currently quoted on tight spreads. Between them, $SembInd MBeCW260730(NBDW.SI)$ (https://warrants.com.sg/tools/livematrix/NBDW) is the trending call warrant with the tightest spreads and highest liquidity – costing $0.043 as of 938AM while SCI is trading at $6.17, and will move approximately 4.7% based on a 1% moves in SCI shares based on its current effective gearing level of 4.7x.
There is no put warrant available over SCI shares.
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