Keppel Corporation - UOB Kay Hian 2021-07-30: 1H21 A Decent Performance With Dividends The Highlight

KEPPEL CORPORATION LIMITED (SGX:BN4) | SGinvestors.io KEPPEL CORPORATION LIMITED (SGX:BN4)

Keppel Corporation - 1H21 A Decent Performance With Dividends The Highlight

  • Keppel Corp reported a reversal of fortunes in 1H21 with a better-than-expected net profit of S$300m vs a loss of S$537m in the year-ago period. Even excluding exceptional items and government grants, the company would have reported a solid net profit of S$280m.
  • The highlight of the results was Keppel Corp’s declaration of an interim dividend of S$0.12 vs S$0.03 in 1H20.
  • Maintain BUY rating on Keppel Corp. Target price raised to S$6.48 (previously S$6.37).



Keppel Corp's 1H21 Results

  • Strong 1H21 results despite challenges. Keppel Corp (SGX:BN4) reported a strong 1H21 with revenue rising 16% y-o-y to S$3.7b resulting in a net profit of S$300m vs a loss of S$537m in 1H20, which arose due to S$1b in impairments. See Keppel Corp's announcements.
  • We note that excluding exceptional items and government grants, Keppel Corp’s 1H21 net profit of S$280m was even higher than 1H19’s net profit of S$149m. The better-than-expected performance in 1H21 was attributed to strong operational performance from the urban development, asset management and energy & environment business segments.
  • Positive surprise on dividends. Keppel Corp declared an interim dividend of S$0.12/share which is significantly higher than the S$0.03/share paid in 1H20 and even higher than 1H19’s interim dividend of S$0.08/share. We have upgraded our dividend estimate for 2021 to S$0.20/share (implying a 3.7% yield) and we expect consensus to upgrade as dividend estimated for this year were S$0.17/share.

Stock Impact

  • The urban development segment saw a 115% y-o-y increase in units sold, and a 177% y-o-y increase in revenue to S$2.5b. It was notable that all of Keppel Corp’s key markets contributed to the strong decline further as the company guided that it will look to achieve the higher end of the S$3-5b target by end-23.


Upgrading Keppel Corp's 2021 earnings forecast.






Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2021-07-30
SGX Stock Analyst Report BUY MAINTAIN BUY 6.48 UP 6.370



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