Keppel down 0.9%; Results lackluster: Religare

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: Religare Capital

Price Call: BUY

Target Price: 12.80

Keppel is down 0.9% at $11.29 after reporting 3Q12 net profit fell 14.7% on-year to $346.4 million. The results were lackluster, says Vincent Fernando, an analyst at Religare Capital.

He notes the results showed further margin pressure; “While the company has been guiding for margins to come down for some time, we’re seeing this play out,” he says, noting Keppel is guiding for lower steady-state margins ahead. He has cut his target price to $12.80 from $13.90. He keeps a Buy call, noting there’s still upside to the stock, but he expects continued margin pressure and sees a lack of major catalysts near-term.

Orderbook quotes suggest the stock is unlikely to retest its $11.24 intraday low.

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