Jeffrey Tan Published on Fri, Jul 30, 2021

Analysts are more optimistic on Keppel Corp after the conglomerate posted a glowing set of 1HFY2021 results ended June 30.

UOB KayHian says the company’s better-than-expected performance was attributed to strong operational performance from the urban development, asset management and energy & environment business segments.

“Even excluding exceptional items and government grants, the company would have reported a solid net profit of $280 million,” UOB KH analyst Adrian Loh writes in a July 30 report.

The brokerage has kept its “buy” call for the stock with a higher target price of $6.48 from $6.37 previously.

CGS-CIMB Research says all of Keppel’s business segments were profitable in 1HFY2021, except for infrastructure, which recorded a net loss of $269 million due to $318 million of impairments from KrisEnergy’s liquidation.

“It’s all coming together,” CGS-CIMB’s head of research Lim Siew Khee writes in a note dated July 29.

CGS-CIMB has maintained its “add” rating for the stock with a higher target price of $6.90 from $6.40 previously.

On July 29, Keppel reported earnings of $299.8 million for the half-year period, reversing from a net loss of $537.1 million in the previous corresponding period.

Its revenue, too, increased 15.5% y-o-y to $3.68 billion due to higher contribution from the urban development, asset management, as well as energy and environment segments.

Following the results, analysts reckon that Keppel’s bottom line could do even better ahead.

UOB KH has raised its FY2021 earnings forecast by 32% to factor in the stronger-than-expected 1HFY2021 performance of the urban development and asset management businesses.

CGS-CIMB, on the other hand, has adjusted its FY2021-FY2023 earnings per share forecasts to account for higher losses in offshore and marine, offset by higher asset management and infrastructure earnings.