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Keppel’s higher fund management fee income to contribute to earnings growth in FY2024: PhillipCapital

Felicia Tan
Felicia Tan • 2 min read
Keppel’s higher fund management fee income to contribute to earnings growth in FY2024: PhillipCapital
Analyst Peggy Mak’s target price remains unchanged at $7.98. Photo: Keppel
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PhillipCapital analyst Peggy Mak is keeping her “accumulate” call on Keppel after the group’s business update for the 1QFY2024 ended March 31. Little financial details were revealed, though the group reported a quarterly revenue for continuing operations of $1.5 billion, 6.25% lower y-o-y.

In her report dated April 26, Mak notes that the pace of asset monetisation slowed in the 1QFY2024 as well, with only $169.9 million achieved. The number includes the divestment of the landback in Wuxi, China, for $161 million. For the FY2023, Keppel achieved total asset monetisation of $947.4 million.

Looking ahead, Mak expects Keppel to see improvement in its earnings for the FY2024, which is likely to be derived from higher fund management fee income.

“With 60% of its energy-generating capacity locked in on contracts of more than three years, energy sales would provide a stable and recurring earnings base. The 600MW Keppel Sakra Cogen plant is 51% completed and expected to contribute from early FY2026,” she writes.

“The acquisition of a 50%-stake in Aermont Capital is expected to be completed by end-April 2024, bringing total funds under management to $79 billion. Aermont will be a launchpad for Keppel to access the sovereign wealth and pension funds in Europe,” she adds.

Mak’s target price remains unchanged at $7.98.

See also: Brokers’ Digest: Pan-United, Yangzijiang Shipbuilding, Raffles Medical Group, Frencken, Japfa, Oiltek, CDL, AEM, DFI

As at 11.24am, shares in Keppel are trading 4 cents higher or 0.59% up at $6.86.

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