Keppel Earnings Preview: Leading 2023 Market Returns and Expanding Investment Horizon

Keppel Corporation is slated to release its fourth-quarter and full-year financial results for 2023 February 1. Bloomberg analysts forecast a 6.23% increase in Keppel's 2023 revenue to SGD 7 billion, with EPS expected to fall by 1.16% to SGD 0.51.

According to moomoo's analyst rating feature, the consensus average target price stands at SGD 7.63, with the highest target set at SGD 9.09, representing a 28% premium over the current price. Of the ten analysts offering ratings, 70% have issued a 'Buy' recommendation, while 10% maintain a 'Neutral' stance. Below are the detailed ratings provided by the analysts.

Keppel Corp's asset monetization aims to streamline its strategy by selling off non-core assets to reduce debt and enhance financial flexibility. Funds from these sales will be reinvested in key sectors including offshore and marine, property, and infrastructure, thereby sharpening the company's focus and potentially boosting shareholder value.

This company currently focuses on an asset monetization plan. As indicated to retail shareholders in an earlier investor briefing, the company aims to achieve SGD 5 billion in cumulative asset monetization by 2023, with a target of SGD 10 to 12 billion by 2026. Ultimately, the asset monetization initiative is expected to reach 3.5 times the current figure, totaling SGD 17.5 billion.

Keppel is transitioning towards a manager of alternative real assets. The company forecasts that by 2026, the market size for Alternatives AUM (Assets Under Management) will reach USD 23.2 trillion, presenting significant growth potential.

It plans to quadruple its AUM to SGD 200 billion by 2030, a significant increase from its AUM reported in 2022.

Keppel has acquired Aermont Capital, a prominent European real estate firm, in a deal valued up to €931.9 million (S$1.4 billion), signaling a strategic investment in real assets. Analysts from Macquarie Equity Research and UOB forecast that this acquisition will substantially boost Keppel's Funds Under Management (FUM) and facilitate the conglomerate's broader growth objectives.

Keppel boasts a robust portfolio of investments within the energy sector. Keppel Infrastructure Trust (KIT) is committing up to 109 million euros (S$159 million) to acquire a 45 % stake in a solar portfolio from Enpal, Germany's first green-tech unicorn. The acquisition will bring some "highly predictable cash flows."

Keppel Corporation has signed an MOU with Masdar at COP28 to explore Energy-as-a-Service, Waste-to-Energy, and efficient desalination projects in the Middle East. This partnership aims to triple global renewable energy capacity by 2030 and double the annual rate of energy-efficiency improvement to over 4% each year until 2030.

Moreover, Keppel offers Energy-as-a-Service solutions for sustainable urban development, including high-efficiency cooling, sustainable energy and storage, distributed solar photovoltaic systems, and electric vehicle charging infrastructure. Additionally, via subsidiary M1, Keppel aims to bolster business digitalization in Singapore.