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Keppel Corp Ltd BN4 Stock Quote

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Morningstar‘s Stock Analysis BN4

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Keppel’s Q3 Business Update In Line; Positive Development on Proposed Deal With Sembcorp Marine

Chokwai Lee, CFA Senior Equity Analyst

Analyst Note

| Chokwai Lee, CFA |

We raise fair value estimates of Keppel and Sembcorp Marine, or Sembmarine, to SGD 9.40 (from SGD 7.30) and SGD 0.12 (from SGD 0.10), respectively, after incorporating the stronger order wins and the latest development on the proposed offshore and marine, or O&M, transactions. There was no major surprise in Keppel’s third-quarter 2022 business update, which did not provide detailed earnings numbers. Cumulative nine-month revenue was up 24% year on year, within our expectation, while net profit improved year on year with stronger performance from the energy and environment and asset management segments. Meanwhile, we think the revised terms on the proposed combination of Keppel O&M, or KOM, and Sembmarine have improved the deal certainty and we expect it to be approved by respective shareholders. Hence, we raised Keppel’s fair value estimate to factor in its eventual 54% stake in Sembmarine, and think the shares are attractive currently. We believe Sembmarine is fairly valued now following the more than 50% share price run-up year to date.

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Key Statistics BN4

Company Profile BN4

Business Description

Singapore-based Keppel is one of the world’s largest offshore rig builders, which builds and repairs world-class drilling rigs used in offshore oil and gas exploration and production, with more than three decades of experience. Keppel follows a "near market, near customer" strategy, operating multiple shipyards in regions with a significant client presence. As a conglomerate with marine, property, infrastructure, and other businesses, Keppel’s revenue is diversified with the property sector being the largest earnings contributor in 2021.

1 HarbourFront Avenue, No 18-01, Keppel Bay Tower
Singapore, 098632, Singapore
T +65 62706666
Industry Conglomerates
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2022
Employees 16,393