Keppel Limited (SGX:BN4) has garnered positive sentiment from analysts after delivering a “strong” business update for 1QFY2025 ended March 31, with a 25% year-on-year net profit growth. Though no specific net profit number was disclosed, the rise was attributed to steady infrastructure earnings, stronger real estate contributions, and robust asset management performance, excluding legacy offshore and marine (O&M) assets.
In its April 24 update, Keppel revealed it has monetised around $347 million in assets year-to-date, mainly from divestments in China and Vietnam.
CGS International Research View
CGS International analyst Lim Siew Khee called the asset sales “decent progress,” noting that divestment gains could reach approximately $245 million, above her earlier estimate of $210 million for FY2025. Lim maintains an “Add” call on Keppel with a target price of $9.28, seeing upside for dividends, forecasting a 35-cent dividend payout — a 5.2% yield.
Keppel also announced it is in advanced talks to monetise an additional $550 million in real estate assets in India and Singapore. Potential candidates include i12 Katong mall and the Mumbai Urbania Township project.
Addressing concerns over tariffs, CEO Loh Chin Hua said impacts would be “limited” since Keppel isn’t heavily exposed to manufacturing or exports.
Meanwhile, with the termination of a segregated account arrangement with Seatrium Ltd (SGX:S51), Keppel unlocked $291 million in cash and now holds a 1.87% stake in Seatrium, valued around $120 million at Seatrium’s closing price of $1.90.
Despite softer oil prices, Keppel continues to market its uncontracted rigs, attracting enquiries from Brazil, the North Sea, Gulf of Mexico, and Southeast Asia.
Lim sees further upside to her FY2025 net profit forecast of $864 million, helped by the sale of Keppel’s stake in Tianjin Fulong Property Development Co for RMB503.3 million ($92.8 million).
UOB Kay Hian Perspective
UOB Kay Hian analyst Adrian Loh echoed optimism, maintaining a “Buy” call with an unchanged target price of $9.25. Loh flagged that the end of the Seatrium account could result in a special dividend if Keppel monetises its Seatrium shares — equivalent to about 23 cents per Keppel share.
Loh highlighted that Keppel trades at an attractive 11.6x FY2025 P/E and 1.1x P/B, delivering a prospective yield of 5.7%. With over 80% of net profit now coming from recurring income streams, Keppel is better positioned post-O&M divestment, he noted.
DBS Group Research Outlook
DBS Group Research lauded Keppel’s “stronger-than-expected” 1QFY2025 performance, particularly its net profit rise and commendable asset monetisation despite market headwinds. However, they noted that asset management fees, up 9% y-o-y to $96 million, lagged behind the $120–137 million range seen in 2QFY2024.
Despite risks from trade wars and softer consumer sentiment, DBS views Keppel as an “underappreciated defensive play”, emphasising the group’s focus on essential services such as energy, infrastructure, and connectivity. DBS has kept its “Buy” rating with a target price of $9, noting an attractive dividend yield of over 5%.
Morningstar Research Assessment
Morningstar analyst Xavier Lee maintained a “Four-Star” rating on Keppel with a target price of $8.60, the most conservative among analysts. Lee sees Keppel’s transformation strategy as “on track” and believes the group remains undervalued, citing resilience even amid global trade uncertainties.
Lee pointed to Keppel’s success in fundraising, with $1.6 billion in equity raised — a 3.5x increase year-on-year — across vehicles like the Keppel Education Asset Fund II and Keppel Data Centre Fund III. Institutional demand remains strong among larger pension funds and sovereign wealth funds, Lee noted.
📈 Keppel’s Strategic Momentum:
🔹 25% net profit growth
🔹 $347M assets monetised YTD
🔹 New $550M asset monetisation pipeline
🔹 Over 80% recurring income base
🔹 Attractive dividend yield ~5%
Keppel’s transformation and resilient earnings are keeping analysts firmly bullish amid global uncertainty.
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