18/1 review on Keppel Corp

ANALYSTS CHART COMMENT ON KEPPEL CORPORATION LTD (S$8.56) - BUY : CIMB-GK GOH SECURITIES RESEARCH HOUSE - 18/01/2010

Company Background
Keppel Corporation Limited's core businesses are offshore and marine, infrastructure, property investment and development, telecommunications and transportation, energy, and engineering.
Latest Development

Dec-09, Sino-Singapore Tianjin Eco-City (SSTEC) took another leap forward in its devt as it began construction on the 130-ha Eco-Industrial Park, estimated to cost about Rmb4b to develop and draw in Rmb4b worth of invs and about 10k jobs when completed. Earlier, SSTEC signed an Rmb13b agmt with Farglory Land Beijing to develop a 1.4m sqm integrated eco community for nearly 13k households as well as a "play" hub for residents and visitors of the TEC when fully completed in 2014. Co won another US$152m contract from Noble to upgrade and repair a 3rd Brazil-based drillship. Co clinched 3 contracts worth $160m, for a Floating Production Storage and Offloading vessel conversion, a Derrick Lay Barge completion and the life extension of a semisubmersible rig.9M09 earnings soared 61.2% on the back of an exceptional $422.2m gain from sale of stake in SPC. Stripping out one-time item, earnings increased 10.6% to $922.19m. As at 30 Sep-09, Co has a net cash of almost $1b and a net cash ratio of 0.12 times.

Chart Comment
FY10P/E: 13.7x, P/BV: 2.1x
• Since the breakout of its triangle, we have remained bullish on the stock with the last buy call on the 4th Dec. It has yet to make to reach the targeted S$9.00-9.35 levels but it has managed new 52-week highs since then.
• As its MACD is still above its trend line and the stock is trading above its moving averages, we are still bullish on the stock. The RSI is neutral at the moment.
• The stock is still a buy with the same stop loss point of below S$8.10, its critical support. S$9.00-9.35 remains the likely upside resistance.


Prices of Keppel had dropped at least $0.15 since the report. Still believe in the fundamentals of Keppel though, might be buying in a lot or 2 if it drops close to $8.35.