Saturday, April 26th, 2025

Sembcorp Industries’ FY2024 Annual Report Highlights Resilient Performance, Transformation Efforts

SingPost Shakes Up Leadership as Restructuring Continues

Lim & Tan Securities | 2 April 2025
The national postal service provider SingPost (SGX: S08) has undergone a series of executive departures, with several key leaders exiting the company amidst an ongoing organizational restructuring.

Executives Depart Amid Restructuring

According to The Business Times, four senior SingPost executives have recently left the company, including the head of strategy and communications, group chief people officer, group chief information officer, and chief sustainability officer. Additionally, the chief information security officer and the head of IT infrastructure and service management also announced their departures.
These manpower changes follow SingPost’s announcement in February 2025 regarding the retrenchment of 45 employees, primarily from corporate support units, as part of an organizational restructuring to “rightsize and devolve corporate functions to its business units.”

Streamlining Operations and Focusing on the Energy Sector

With these changes, SingPost is left with four key management executives: the group chief operating officer, group chief financial officer, acting chief executive officer for the international business unit, and the chief legal officer.
The company stated that the restructuring is aimed at improving the agility and efficiency of the business, amid challenges such as intense competition. This aligns with SingPost’s strategic focus on the energy sector, as evidenced by the proposed divestment of its environment business for S$405 million, a 43% premium over the book value.

Valuation and Outlook

At its last traded price of S$0.615, SingPost has a market capitalization of S$1.4 billion and trades at a forward P/E of 24.6x and a P/B of 1.2x, with a dividend yield of 1.5%. The consensus target price stands at S$0.75, representing a 17.1% upside.
While the research team at Lim & Tan Securities maintains a “Buy” recommendation on SingPost, they believe a key rerating catalyst will be the anticipated special dividend following the completion of the Australian business sale. However, if the special dividend is minimal, the team believes SingPost’s post-dividend share price may struggle to sustain its valuation, given the importance of the Australian business to the company.
The resolution of SingPost’s postal business negotiations with the government will also be crucial in ensuring the long-term sustainability of the company.

Sembcorp Industries Delivers Resilient Performance

Sembcorp Industries (SGX: U96), another Singapore-listed company, has reported a resilient financial performance in 2024, with group net profit before exceptional items surpassing the S$1 billion mark for the second consecutive year.
The company’s Gas and Related Services segment delivered strong results, with earnings remaining resilient despite a 34% decline in Singapore wholesale electricity prices. Sembcorp has actively managed its gas portfolio to support Asia’s transition to a clean and responsible energy future, while also growing its renewables portfolio.
Sembcorp has also made significant progress in its 2024-2028 strategic plan, transforming its business to meet the evolving needs of the energy sector. The company has successfully secured over 2GW of hybrid renewable energy bids in India, demonstrating its expertise in developing and executing projects.
At its last traded price of S$6.42, Sembcorp Industries is capitalized at S$11.5 billion and trades at a forward and prospective P/E of 10x, with a forward dividend yield of just under 4%. The research team at Lim & Tan Securities maintains an “Accumulate” rating on the stock, with a one-year consensus upside target of S$7.30 per share.

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