Sembcorp Industries' stock surged 3.38% in intraday trading following the announcement of its acquisition of Australia's Alinta Energy. The move is viewed positively by analysts, with Phillip Securities Research maintaining a buy rating on the stock.
The acquisition is expected to boost Sembcorp's profit after tax and minority interest by 23%, based on trailing 12-month earnings. Additionally, the deal includes a pipeline option of 10.4 gigawatts of mostly renewable-energy capacity, positioning the company for future growth in sustainable energy.
Phillip Securities Research highlighted the strategic importance of the acquisition, though it adjusted the target price to S$7.10 from S$7.90 to reflect lower Singapore electricity spread assumptions. The market's positive reaction underscores investor confidence in Sembcorp's expansion strategy.
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