Comprehensive Analysis of Key Companies in Lim & Tan Securities’ Report

Date: 19 November 2024 | Broker: Lim & Tan Securities

Keppel Ltd: Steering Towards Asset Monetization

Keppel Ltd, trading at \$6.58, has made a pivotal announcement regarding its future endeavors. The company is capitalizing on the improving conditions in the offshore rig market. By securing control over 13 legacy rigs held by Rigco Holding Pte. Ltd. (Asset Co), Keppel aims to enhance its asset monetization strategy through a selective capital reduction (SCR) exercise.

Currently, Keppel holds a 10% equity stake in Asset Co, along with S\$139 million in perpetual securities and about S\$4.3 billion in vendor notes. Upon the successful completion of the SCR by end-2024, Asset Co will become a wholly-owned subsidiary of Keppel, housed within a newly created private fund managed by Keppel itself. This strategic move will allow Keppel to effectively manage and monetize legacy assets, aiming for optimal risk-adjusted returns.

Keppel’s market cap stands at S\$11.5 billion, trading at 13.8x forward PE and 1.1x PB with a dividend yield of 5.2%. The report maintains a BUY recommendation, with a target price (TP) of \$7.72, representing a 20.4% upside to the current share price.

Frasers Property Ltd: Transforming Robertson Quay

Frasers Property Ltd (FPL), in partnership with Sekisui House, is set to redevelop Robertson Walk and Fraser Place Robertson Walk into a vibrant waterfront lifestyle hub. This development will feature 348 residential units and retail spaces, injecting new life into the Robertson Quay precinct.

The redevelopment is a 51:49 joint venture between FPL and Sekisui House, covering a gross floor area of 30,664 sqm. The project aligns with Singapore’s rejuvenation plans for the Singapore River Planning Area, enhancing the locale with upscale dining and entertainment options.

FPL’s strategic move is timely, considering the expected interest rate cutting cycle, which is poised to buoy Singapore’s residential property market. The report maintains an “Accumulate” rating on FPL with valuations at 0.38x book, a 5% dividend yield, and an upside potential of 40% with a target price of \$1.31.

Frasers Logistics & Commercial Trust: Delivering Consistent Returns

Frasers Logistics & Commercial Trust remains a strong performer within the FSSTI universe, maintaining a forward dividend yield of 7.12%. It continues to leverage its robust portfolio to deliver stable returns to its investors.

Mapletree Investments: A Diverse Portfolio

Mapletree’s group of trusts—Mapletree Pan Asia Commercial Trust, Mapletree Logistics Trust, and Mapletree Industrial Trust—stand out for their competitive performance. These trusts offer forward dividend yields of 6.61%, 6.38%, and 5.85% respectively, highlighting their strong position in the market.

Venture Corporation: A Solid Investment Choice

Venture Corporation is noted for offering a forward dividend yield of 5.82%, making it an attractive proposition for investors seeking consistent income. Its strategic focus and market position continue to uphold its strong performance.

Jardine Group: Leveraging Low Valuations

Jardine Cycle & Carriage, Jardine Matheson, and Jardine Matheson boast low consensus forward P/E ratios, indicating potential undervaluation. These companies offer forward dividend yields ranging from 8.17% to 8.64%, making them attractive for value investors.

Yangzijiang Shipbuilding: A Maritime Leader

Yangzijiang Shipbuilding is recognized for its low trailing EV/EBITDA ratio of 5.05, suggesting efficient capital deployment. Its robust financial metrics underpin its strong market position.

Singapore Airlines and Sembcorp Industries: Aiming High

Singapore Airlines and Sembcorp Industries are noted for their forward dividend yields, standing at 9.41% and 9.46% respectively. These companies demonstrate resilience and strategic growth in their sectors.

Genting Singapore: A Balanced Approach

Genting Singapore showcases a low trailing P/B ratio of 0.33, reflecting its strategic asset management and potential for future growth.

Hongkong Land and UOL Group: Strong Contenders

Hongkong Land and UOL Group stand out with low trailing P/B ratios, making them compelling options for investors seeking undervalued opportunities in the property sector.

Wilmar International: A Global Agribusiness Leader

Wilmar International, with its low trailing P/B ratio, continues to leverage its extensive network and operational efficiencies to maintain its leading position in the agribusiness sector.

Conclusion

The report by Lim & Tan Securities provides a comprehensive view of various listed companies, each with its strategic direction and market performance. Investors are encouraged to consider these insights while making informed investment decisions.