May[1] - Keppel T&T (BUY<$1.68; Proxy to logistic & data center)

COUNTER: KEPPEL TELECOMMUNICATION & TRANPORTATION LTD

BUSINESS: 
The subsidiary of Keppel Corp, is a leading service provider in Southeast Asia and Europe with businesses in logistics and data center. In logistics, it offer one-stop, integrated solutions to help clients manage their entire supply chain. It owns and operates data centers across Asia Pacific and Europe, providing dedicated co-location suits with technical support. 

OVERVIEW:

On the latest financial results (1Q15), Keppel T&T registered 2% drop in revenue quarter on quarter, mainly due to lower revenue from data center division. Operation profit was lower as well due to absence of contribution from two data centers which have been divested to Keppel DC Reits. However, its logistics revenue grew 10% year on year, driven by the opening of Tampines Logistics Park and Vietnam Singapore Industrial Park.

Looking ahead, its Tianjin Eco-city Distribution Centre will be completed and operational on following quarter. First phase of Keppel Wanjiang Logistics Park is on track for completion by end of 2015. In its existing assets of data centers, revenue contribution has been growing steadily amid ramp up of occupancy. The groups is continuously seeking new data center development and acquisition opportunities in the regions.

REASONS TO BUY:
(1) The counter has been producing stable income over the past few years with low debt ratio.
(2) 2015 profit could be driven by opening of more logistic warehouses in the region.
(3) Due to release of high dividend lately, the counter has seen big gap down on its share price. However, its price has been gaining support around 1.635. Potential price gain is presented.

ENTRY PRICE:
Buy <$1.68 for potential price gain. It can be treated as defensive counter in one's portfolio for its strong fundamental prospect.