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Keppel Corp Ltd BN4

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Morningstar’s Analysis

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Keppel Raises Offer Price for SPH’s Non-Media Business; Shares Remain Undervalued

Chokwai Lee, CFA Senior Equity Analyst

Analyst Note

| Chokwai Lee, CFA |

We keep Keppel’s fair value estimate at SGD 7.00 following its plan to raise the offer price to acquire Singapore Press Holdings’, or SPH’s, ex-media assets. Our fair value estimate for Keppel does not incorporate the proposed acquisition, but we take comfort that the offer price is final and would not be further increased, indicating Keppel’s capital discipline and thus avoids the risk of overbidding that could destroy value. We believe the firm remains undervalued at the current share price, supported by its diversified business.

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Company Profile

Business Description

Singapore-based Keppel is one of the world’s largest offshore rig builders, which builds and repairs world-class drilling rigs used in offshore oil and gas exploration and production, with more than three decades of experience. Keppel follows a "near market, near customer" strategy, operating multiple shipyards in regions with a significant client presence. As a conglomerate with marine, property, infrastructure, and other businesses, Keppel’s revenue is diversified with the property sector being the largest earnings contributor in 2019.

Contact
1 HarbourFront Avenue, No 18-01, Keppel Bay Tower
Singapore, 098632, Singapore
T +65 62706666
Sector Industrials
Industry Conglomerates
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 18,452