Company Name: KEPPEL CORPORATION LIMITED
| Research House: Daiwa | Price Call: BUY | Target Price: 12.45 |
Daiwa says Keppel’s 3Q12 results were slightly below its expectations, but it still expects a strong 2012. It says the results missed its forecast on weaker-than-expected property contribution and higher materials and subcontract costs, but the house remains optimistic; it notes O&M’s 3Q12 revenue was the strongest in the past three years, with margins above management’s guided range of 10%-12%.
It expects the key share price driver for the next year to be O&M order wins, noting $9.13 billion-worth landed year-to-date. It expects the property segment to be less of a factor ahead, with Keppel likely to adopt a more cautious stance on property development, leveraging growth more toward the offshore business. It raises its target to $12.45 from $12.25, keeping an Outperform call. The stock is down 0.9% at $11.29.
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