Keppel Corp

Re: Keppel Corp

Postby winston » Fri Oct 24, 2008 8:31 am

Not vested.

RESEARCH ALERT-JPMorgan cuts Keppel's price target


SINGAPORE, Oct 24 (Reuters) - JPMorgan has cut its price target for Singapore's oil rig-maker Keppel Corp to S$7.0 from S$12.0, citing concerns over a reduced orderbook, but maintained its "overweight" rating on the stock.

"We remain overweight on Keppel Corp and reduce our Dec. 2009 price target to S$7.00 after factoring in a decreasing orderbook assumption and reduction in market valuations of listed entities," JPMorgan analysts Winnifred Heap and Ying-Jian Chan said in a report.

The report came after Keppel, the world's largest offshore oil rig builder, posted a 10 percent rise in third-quarter profit on Thursday, but said expansion in rig fleets could be constrained by tight credit.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 109484
Joined: Wed May 07, 2008 9:28 am

Re: Keppel Corp

Postby LenaHuat » Fri Oct 24, 2008 12:59 pm

2day's BT :
With robust free cashflow of $1.5b for the first 9 months, Keppel's gearing has been lowered to 3%. The group is virtually debt free and the balance sheet is strong.


At around $4, I think this is looking attractive.
Please be forewarned that you are reading a post by an otiose housewife. ImageImage**Image**Image@@ImageImageImage
User avatar
LenaHuat
Big Boss
 
Posts: 3985
Joined: Thu May 08, 2008 9:35 am

Re: Keppel Corp

Postby winston » Fri Oct 24, 2008 2:23 pm

From Kim Eng:-

Keppel Corp – 3Q08 results (Rohan Suppiah 64321455) Previous day closing price: $4.00
Recommendation: Hold (maintained)
Target price: $6.72 (reduced from $7.65)

O&M still solid

Keppel Corp recorded a 10% growth in 3Q08 earnings to S$272.9m, but was down sequentially by 9%. Earnings from Offshore and Marine (O&M) remained robust, with EBITDA growing 26% sequentially. However, the shortfall came from:-
1) the dismal showing of SPC, which recorded a 99% drop in quarterly earning due to thinner refining margins, with the recent sharp slide in crude oil prices; as well as
2) flat contributions from its property division. While infrastructure recorded a sequential doubling of earnings, primarily from its CoGen plant, its overall contribution remains relatively small and uneven.

Offshore still good for the long run
Keppel has stressed that while its O&M earnings are expected to be solid for the next 18 months on its current orderbook, it has acknowledged that the near-term prospects for new orders may be muted in the current tight credit market. However, it believes that the underlying demand for offshore equipment is intact, with crude oil prices currently still above the estimated US$50 per barrel profitability threshold for offshore oil. It also does not expect any significant order cancellations, as its orderbook is well diversified with strong customers, including national oil companies. Furthermore, O&M has received 50% payment for all contracts.

Cutting earnings for SPC and Property
We are cutting our FY08 forecast by 10% to S$1,051.0 on the back of lower contributions from SPC and property, implying a 7% decline from FY07. FY09 earnings are also cut by 5%, but we are still forecasting 26% growth on the back of a steady performance from O&M and accelerating earnings from Infrastructure. We are also cutting our DPS assumption, assuming a 67% payout ratio versus almost 100% in FY07 (including its capital reduction). Keppel may choose to preserve cash in the current market environment, either for prudence or to fund potential acquisitions.

Earnings are solid, but will the market pay attention?
We are adjusting our sum-of-the-parts valuations to
1) market prices of listed entities;
2) a 8x multiple on lower prospects of its O&M division; and
3) lower potential selling prices of Reflections.
This yields a fair price of S$6.72 per share, or 68% upside to its current share price. While this upside potential, coupled with a yield of 11% is compelling, we maintain our Hold recommendation pending more stability in the broader market.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 109484
Joined: Wed May 07, 2008 9:28 am

Re: Keppel Corp

Postby winston » Fri Oct 24, 2008 4:18 pm

From CIMB:-

Keppel Corporation (S$4.00) - 3QFY08 results - Order outlook deteriorates

Slightly above. 3Q08 net profit rose 6% yoy to S$273m, 7% above our expectations but in line with consensus. The outperformance came from stronger-than-expected associate contributions and a tax write-back of S$6m in the quarter. 9M08 earnings of S$834m (+10% yoy) form 78% of our FY08 estimate.

Strong earnings and stable margins for Offshore & Marine. O&M drove earnings growth (70% of group earnings) with a net profit of S$197m (+56% yoy) in 3Q08. Operating margins remained stable at about 10% while net margins hovered at 8%. We believe this trend will continue into FY09. But order outlook deteriorated. Management expects the O&M order momentum to slow down in view of volatile credit markets over the next 12-15 months.

While no order cancellation is expected, management is monitoring customers’ financing status closely as some may come under credit stress. YTD order wins were S$5.2bn with a net order book of 13bn. We are cutting our order assumptions for FY09 to S$2bn from S$2.5bn and to S$1.8bn from S$2bn for FY10, to be conservative. Accordingly, our earnings estimates have been reduced by 0.8-4% for FY09-10.

Infrastructure progressing well. 3Q08 revenue was up 123% yoy to S$639m with net profit up 275% yoy to S$15m, thanks to Keppel’s cogen plant and the Qatar solid waste project. However, the division contributed only 5% to group earnings.

Property and Investment major drags. KepLand’s earnings declined as expected (-43% yoy) to S$37m due to a sluggish economy and weakened demand. Slower demand for refined oil products and volatile refining margins for SPC also hurt Investment earnings (net profit -55% yoy to S$24m).

Maintain Neutral; target price cut to S$5.40 from S$6.10, still based on sum-of-theparts valuation. We maintain our 10x CY10 P/E valuation for O&M, in line with our target for SembMarine, but negative sentiment from job cuts and declining office demand could weigh on KepLand for a while. As such, we are temporarily valuing KepLand using its current share price (instead of target price). All in all, our sum-of-the-parts target price for KepCorp drops from S$6.10 to S$5.40.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 109484
Joined: Wed May 07, 2008 9:28 am

Re: Keppel Corp

Postby LenaHuat » Fri Oct 31, 2008 1:04 pm

LenaHuat on 24 Oct 2008 wrote:2day's BT :
With robust free cashflow of $1.5b for the first 9 months, Keppel's gearing has been lowered to 3%. The group is virtually debt free and the balance sheet is strong.


At around $4, I think this is looking attractive.


No1 thinks like me :?:
Please be forewarned that you are reading a post by an otiose housewife. ImageImage**Image**Image@@ImageImageImage
User avatar
LenaHuat
Big Boss
 
Posts: 3985
Joined: Thu May 08, 2008 9:35 am

Re: Keppel Corp

Postby LenaHuat » Wed Nov 05, 2008 5:08 pm

KepC is into producing icebreakers :D . There is a great potential for this. The North Pole ice sheets are melting so fast that navigators anticipate new and shorter sea routes via the NP. The integrated environmental engineering biz should look good now that both China and the US are going to be govt-infrastructure driven economies in the next 5 years.

2day, this ticker is continuing to trend up very strongly.
Please be forewarned that you are reading a post by an otiose housewife. ImageImage**Image**Image@@ImageImageImage
User avatar
LenaHuat
Big Boss
 
Posts: 3985
Joined: Thu May 08, 2008 9:35 am

Re: Keppel Corp

Postby winston » Wed Nov 05, 2008 5:10 pm

Hi Lena,

Do you happened to know how much this ice-breakers would be % of revenue ?

For Keppel, I'm a bit concerned about Keppel Land and SPC. Rigs should be ok for one more year.

Thanks and take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 109484
Joined: Wed May 07, 2008 9:28 am

Re: Keppel Corp

Postby LenaHuat » Wed Nov 05, 2008 5:16 pm

Hi Winston

I've not got the numbers as I had been very busy lately. I will remember your question and when I've gotten the answer, I'll respond :D :D

Good Cheers to U :D
Please be forewarned that you are reading a post by an otiose housewife. ImageImage**Image**Image@@ImageImageImage
User avatar
LenaHuat
Big Boss
 
Posts: 3985
Joined: Thu May 08, 2008 9:35 am

Re: Keppel Corp

Postby winston » Thu Nov 27, 2008 8:16 am

Not vested.

RESEARCH ALERT-Merrill Lynch cuts Keppel to neutral from buy

SINGAPORE, Nov 27 (Reuters) - Merrill Lynch cut its rating on Keppel Corp's shares to "neutral" from "buy" and lowered its price target to S$5.25 from S$6.15, citing risks associated with its subsidiaries as a drag on its share price.

"Merrill Lynch Singapore property analysts are not ready to call the bottom for property stocks as the economic outlook remains depressed," Merrill Lynch analyst Melinda Baxter said in a note.

Merrill Lynch has an underperform rating for shares of Keppel Land and K-REIT , both of which are units of Keppel Corp.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 109484
Joined: Wed May 07, 2008 9:28 am

Re: Keppel Corp

Postby LenaHuat » Thu Nov 27, 2008 6:23 pm

Maybe more bad news coming :
Business Times - 27 Nov 2008 By ANGELA TAN

Keppel O&M's customers looking to cancel newbuild orders

Keppel Offshore & Marine Limited (Keppel O&M) said it has received indications from Seadrill Limited, Scorpion Offshore Ltd, and Lewek Shipping Pte Ltd that they are reviewing their options on their newbuilding contracts that were signed in the middle of this year.

The contracts under review are for a semisubmersible for Scorpion Offshore, two jackup rigs for Seadrill and a Multi-Functional Support Vessel for Lewek Shipping.

Keppel O&M is in talks with them to arrive at mutually acceptable arrangements for these contracts.

Construction work has not started on these projects, for which Keppel O&M has received downpayments.

If these contracts are cancelled, the cancellations are not expected to have any material impact on the net tangible assets or earnings per share of Keppel Corporation for the financial year ending 31 December 2008.

Keppel O&M has a strong orderbook of about $12.5 billion extending through to 2012 and its contracts are cashflow positive.
Please be forewarned that you are reading a post by an otiose housewife. ImageImage**Image**Image@@ImageImageImage
User avatar
LenaHuat
Big Boss
 
Posts: 3985
Joined: Thu May 08, 2008 9:35 am

PreviousNext

Return to H to K

Who is online

Users browsing this forum: Google [Bot] and 3 guests

cron