Sembcorp Industries' stock price soared 3.59% during intraday trading on Wednesday, reflecting significant investor interest.
The surge follows a positive analyst note from CGS International, which highlighted that the Singapore energy-solutions provider appears well-protected from rising global gas prices. According to analysts, Sembcorp's long-term power contracts include fixed margins and cost-pass-through mechanisms, providing a buffer against price volatility. Additionally, the company's piped natural gas import contracts with Indonesia and Malaysia could be leveraged for its own power generation or sold to others facing limited liquefied natural gas supply.
Gas optimization moves and potential higher-than-expected spreads between the market price of electricity and the cost of natural gas could offer further gains for the company's overall earnings. CGS International maintains its "add" rating on the stock with a target price of S$7.68.