SINGAPORE (Jan 4): OCBC Investment Research is maintaining its “buy” call on Keppel Corporation with a fair value estimate of $7.25 on expectations of a continued recovery in the offshore and marine (O&M) segment, as well as the group’s recent developments in China.
The research house is forecasting $2.5 billion of new orders for O&M in 2019 after an estimated $1.7 billion worth of new orders were secured in 2018, compared to $1.1 billion in 2017.
See: Keppel O&M secures $300 mil worth of marine contracts through subsidiaries
In a Friday report, analyst Low Pei Han highlights that Keppel Corp remains active in China’s property sector according to recent news, which she remains positive on.
In particular, she highlights the upcoming 4Q19 launch of Keppel Land China’s residential project in the Chengdu Tianfu New Area, which will be developed on a 4.7-hectare residential site as well as target home upgraders.
“Keppel has a good history of building homes in Chengdu with six residential projects there. The group has launched about 17,800 homes in Chengdu, which are almost all sold out,” notes Low.
See also: RHB initiates coverage on CSE Global with ‘buy’ call with TP of 58 cents
Further, the analyst notes that Keppel Land is in the midst of acquiring a completed commercial property in Beijing’s Haidian District, in line with Keppel Property’s strategy to grow its commercial portfolio in China with a focus on first-tier cities.
The transaction is expected to complete in 1Q19.
“Securing the project is opportune considering that it is a completed asset enjoying almost full occupancy and in a city where supply for quality commercial developments is limited,” comments Low on the group’s acquisition in Beijing.
As at 11:50am, shares in Keppel Corp are trading 1 cent higher at $5.91.
