Similar to other analysts, he points out that the deal is accretive, with reported/underlying EPS increasing 14%/23% respectively and ROE rising to 22.5%/24.3% from 19.7 %. He attributes the difference between reported and underlying figures to mark-to-market fair value losses from energy derivatives.
In a seemingly contrarian analysis, Macquarie Equities Research analyst Foo Zhiwei upgraded Sembcorp Industries (SCI) to ‘outperform’ from ‘neutral’ after SCI announced the acquisition of Alinta Energy. He raised the counter’s target price by 40 cents from $6.64 to $7.04 in his research note dated Dec 12.
At enterprise value to adjusted ebitda ratio of 6.6 times for 12 months ended 30 Jun, Foo describes the valuation of Alinta as “attractive” as it sits between peers AGL Energy (four to five times) and Origin Energy (eight to nine times).
