Keppel Corporation - DBS Research 2022-01-28: All Stars Are Aligned

Keppel Corporation - All Stars Are Aligned

  • Current Keppel Corp (SGX:BN4)'s valuation is undemanding at 0.8x P/B. The strong showing for Keppel Corp in FY21 is evidence of operational improvements across segments that should sustain into FY22. A generous dividend and share buyback exercise lend further support to Keppel Corp's share price. Also, the widely anticipated definitive agreement relating to the yard merger, which would streamline Keppel Corp’s operations to focus on its asset light businesses and sustainable solutions, shall catalyse the share price.
  • Keppel Corp Is an ESG leader in corporate governance, safety, human capital management, and clean energy. It has gained traction in renewable/gas solutions that now contribute ~40% to O&M’s orderbook.
  • Moving up the renewable value chain, Keppel Corp will operate its first solar farm with 500MW capacity in 2023 and aims to raise its renewable energy portfolio to 7GW by 2030. It has established partnerships with various players like StarCharge and AESC to pursue opportunities in electric vehicle (EV) infrastructure including EV/storage batteries, deepening its foothold in clean energy. It is also studying the hydrogen energy value chain, from production to storage and transportation as well as developing decarbonisation solutions.
  • Our SOTP-based target price for Keppel Corp is lifted to S$ 6.90 as we roll over our valuation to FY22, implying 1.05x FY22F P/BV or 0.5SD below five-year mean. Our target price for Keppel Corp is derived based on:
    1. Urban development valued at 0.9x P/BV, implying 25% discount to property RNAV;
    2. DCF valuation for Tianjin Eco-city with 10% WACC; and
    3. connectivity/asset investment/infrastructure/others at 1x P/BV.

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Pei Hwa HO DBS Group Research | 2022-01-28
SGX Stock Analyst Report BUY MAINTAIN BUY 6.90 UP 6.200

Previous report by DBS Research:
2021-07-30 Keppel Corporation - Things Starting To Get Better

Target prices by 4 other brokers at Keppel Corp Target Prices.
Listing of broker reports at Keppel Corp Analyst Report.

Relevant links:
Keppel Corp Share Price History,
Keppel Corp Announcements,
Keppel Corp Dividends & Corp Actions,
Keppel Corp News Articles


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