Keppel Corp (S$11.32) - 4QFY07 results - Bumper dividend
KepCorp's 4Q07 core net profit of S$268.0m (up 46% yoy) was 25% below
our expectation and 9% below consensus due to
margin pressure faced by Offshore & Marine from rising labour costs.
The O&M net order book stood at S$12.2bn (up
16% yoy) with S$7.4bn of new orders secured in 2007. Dividend payout
hit a record 98% or S$0.64/share. Our earnings
estimates have been cut by 9.7% and 7.6% for FY08-09 to reflect further
margin pressure in O&M and slower growth for
Infrastructure for FY08. Our target price has been cut to S$13.70 from
S$17.90, still based on sum-of-the-parts
valuation, following our earnings downgrade and lower fair values for
its listed subsidiaries. Nevertheless,
maintain Outperform as we continue to like Keppel for its strong order
book with predictable earnings that could
provide some buffer against a global recession.
Quick Takes
* Singapore Land - Excessive sell-down unwarranted
* Regional Coal Sector - Benchmark spot price surges
* Singapore Banks - Booming loans an antidote to margin
squeeze
* HDD Sector - Off to a good start
* Regional Coal Sector - Thermal coal decoupling from crude
oil
Corporate News
* Chartered Semicon posts Q4 profit of US$3.42m
* Hour Glass Q3 profit up 58% at $8.2m
* STATS ChipPAC Q4 net jumps 46% to US$41.3m
* Petrobras leases 36% of Chemoil's terminal
* CapitaLand backs Youth Olympics bid in big way
Trading Ideas
* Suntec Real Estate Investment Trust
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