Keppel Corporation – Acquisition of SPH to accelerate Keppel’s Vision 2030 August 3, 2021 882

PSR Recommendation: BUY Status: Maintained
Target Price: 6.280
  • Proposed acquisition of SPH to be earnings accretive, will grow recurring-income base, in line with Vision 2030.
  • SPH owns synergistic businesses with Keppel. Acquisition to provide opportunity for Keppel to expand and enter into secular growth areas.
  • Net gearing to increase to just under 1x after acquisition, which is at the upper end of its historical gearing range. No change to our forecasts pending SPH EGM and regulatory approval.
  • Maintain BUY and SOTP TP of S$6.28, still with a 10% holding-company discount. Our TP translate to about 1.0x FY21e book value, a slight discount to its 5-year average of 1.05x. Catalysts expected from O&M contract wins and a successful resolution to its O&M unit
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About the author

Profile photo of Terence Chua

Terence Chua
Senior Research Analyst
Phillip Securities Research

Terence specialises in the consumer, conglomerate and industrials sector. He has over five years of experience as an analyst in the buy- and sell-side. As an institutional fund management analyst, he sat on the China-Hong Kong desk. Terence was ranked top 3 for Best Analyst under the small caps and energy category in the Asia Money poll 2018.

He graduated from the Singapore Management University with a major in Finance (Honours), and is the honoured recipient of the CFA scholarship.

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