Keppel Corporation - CGS-CIMB Research 2022-08-25: Not A Waste

Keppel Corporation - Not A Waste

  • Through Keppel Infrastructure and Keppel Asia Infrastructure Fund, Keppel Corporation (SGX:BN4) plans to acquire an 80% stake in 800 Super Holdings Ltd. William Lee, co-founder and current CEO of 800 Super, will hold the remaining 20% stake. Kohlberg Kravis Roberts will no longer be an investor.

Why Keppel buy 800 Super - a waste collection company?

  • 800 Super is 1 of the 3 licensed public-waste collectors in Singapore. The other two are SembWaste, part of Sembcorp Industries (SGX:U96), and unlisted ALBA W&H Smart City.
  • We think Keppel Corp bought 800 Super for its recurring income as the public sector waste contracts with the Singapore government range 1-3 years. The Tuas biomass co-generation plant gels with Keppel Corp’s strategy in environment and new energy businesses in KI, as well as the recent joint acquisition of Eco Management in South Korea which operates 6 waste-to-energy plants, 5 sludge drying facilities and the third largest incineration capacity in the country. We believe that in the medium term, this could be an asset to be injected into REITS/Trusts.
  • Consideration for the 80% stake in 800 Super amounts to S$304m. This values 800 Super at 9x FY21 EV/EBITDA or 18.2x FY21 P/E. Note that Kohlberg Kravis Roberts privatised 800 Super (SGX:5TG) in Aug 2019 for 7x FY19 or 33x FY19 P/E. On an EV/EBITDA basis, the deal seems fair.

How does this stack up against Sembcorp Industries?

  • Sembcorp Industries acquired Veolia (a smaller player in the waste collection sector) in Jul 20 for S$19.2m, which values Veolia at 7x FY20 P/E. We think the difference between Keppel Corp and Sembcorp Industries is the latter’s asset light strategy involving operational and its fund management segments. Sembcorp Industries’s focus is on owning and operating at this juncture.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

LIM Siew Khee CGS-CIMB Research | 2022-08-25
SGX Stock Analyst Report ADD MAINTAIN ADD 9.370 SAME 9.370

Read also CGS-CIMB's most recent report:
2022-10-28 Keppel Corporation - Strength On All Fronts (Except Urban)

Target prices by 2 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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