SINGAPORE (May 22): CGS-CIMB Securities is reiterating its “add” call on Keppel Corporation with an unchanged target price of $10 while highlighting the stock as its preferred pick in the capital goods sector as well as a “solid long-term investment candidate” that is on track to regaining its shareholders’ trust, in the research house’s view.
This comes after recently hosting the group’s CEO on an NDR in the US, where Keppel’s management identified Vietnam as a key market capital allocation; said it was positive on the O&M outlook and synergies to the group; and identified liquidity, employment and economic growth as key factors to its property markets in Singapore, Vietnam and China rather than interest rates.
In a report on Monday, analyst Lim Siew Khee says she believes a stronger balance sheet from Keppel O&M and its property division could result in a special FY18F DPS of 8-10 cents, or a dividend yield payout of about 4.2%, which is higher than peers.
