SINGAPORE (Dec 6): UOB Kay Hian is maintaining its "buy” call on Keppel T&T with a target price of $2.53, citing snowballing profit and an earnings boost from its maiden acquisition in Frankfurt.
Lead analyst Edison Chen notes that the Alpha DC Fund’s acquisition of a data centre in Frankfurt came with 50% occupancy, serving as an example of how the fund bolsters Keppel T&T’s ability to acquire income-generating assets while minimizing greenfield asset risks.
The acquisition has added a 7% ($3.9 million) boost to Keppel T&T earnings at 50% utilisation, notes Chen, who believes the number will rise to $5.9 million at full utilisation. In addition, the company would also be able to charge development fees for the project, reaping additional fees on top of the acquisition.
