OVERVIEW:
With a global footprint in close to 30 countries, the company consists mainly of following entities:
Keppel Offshore & Marine (O&M) - one of the world leaders as offshore oil rig provider.
Keppel Land - property developer across Asia region.
Keppel Infrastructure - invest, own and operate energy related infrastructures.
Keppel T&T- services provider in logistics and data centers in Asia-pac & Europe
Keppel Capital - Asset investment and management.
HIGHLIGHTS:
[1] Latest results as below. Property segment was the major bright spot among others. Major contribution came from China.
[2] Its major O&M client, Brasil Sete has filed for bankruptcy. The counter had made $230m as provision for projects involved. Meanwhile, it is being sued over unlawful conspiracy over the projects in US courts. The counter denied the allegations.
[2] Short term loan can be fulfilled by its cash & deposit. Total debt stood ~$8b which translates to Gearing (total debt/equity) < 70%.
INVESTMENT THEMES:
[1] Current valuation: PB ~ 0.9 || Dividend yield ~ 6%
PE ~ 12 (shall Q1 earning be maintained throughout 2016)
[2] Based on projection by Energy Information Administration (EIA), oil glut will be easing on second half of 2016. It could be the the time frame to review offshore & marine related counters for now. Currently, the counter looks attractive with its trading price under its net tangible asset (NTA) per share - $6.16. Recent bull run on crude oil price could further raise risk appetite among investors.
[3] Over next three years, it has about 3000 - 4000 property units to be launched annually in China, and 2000-3000 units in Southeast Asia, notably Indonesia and Vietnam. This could be the major driver of earning in following quarters.
PRICE TREND:
Current price movement is in side way channel. Immediate support is ~5.58. three years trough, 4.8 represents ~7% dividend yield.
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