We transfer coverage of Keppel, with a no-moat rating and raising our fair value estimate to SGD 8.60 per share from SGD 8.40, after tweaking our operating income margin slightly higher. Based on the current price, we think the shares are undervalued and expect positive developments in its asset monetization plans and growth of its fund management platform to drive share price performance.
Higher-than-expected capital gains from the execution of the group’s monetization strategy will unlock more value for Keppel's shareholders.
Keppel’s property business is highly exposed to China and the slowdown in China’s economic growth and real estate sector could negatively affect the firm’s earnings.
|
Metric
|
BN4
|
01038
|
00006
|
|---|---|---|---|
Price/Earnings (Normalized) | — | 14.01 | 14.29 |
Price/Book Value | 1.17 | 0.91 | 1.08 |
Price/Sales | 1.77 | 18.74 | 74.06 |
Price/Cash Flow | 27.04 | 30.19 | 60.41 |
|
Metric
|
BN4
|
01038
|
00006
|
|---|---|---|---|
Quick Ratio | 0.63 | 1.38 | 1.33 |
Current Ratio | 1.04 | 1.48 | 1.34 |
Interest Coverage | 4.50 | 10.77 | 43.20 |
|
Metric
|
BN4
|
01038
|
00006
|
|---|---|---|---|
Return on Assets (Normalized) | −6.37% | 5.09% | 7.13% |
Return on Equity (Normalized) | −16.90% | 6.92% | 7.72% |
Return on Invested Capital (Normalized) | −6.85% | 5.55% | 7.37% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
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