SG: MARKET PULSE: Keppel Corp, AREIT (8 Oct 2013) (Amended copy)

Stock Name: Kep Corp
Company Name: KEPPEL CORPORATION LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 12.87

MARKET PULSE: Keppel Corp, AREIT

8 Oct 2013

KEY IDEA Keppel Corporation: Healthy order wins and expecting more Keppel Corporation (KEP) has secured new orders worth about S$4.9b YTD, close to our original forecast of S$5b. With good order momentum that is supported by prospects in the O&M sector, we increase our new order win forecast to S$6b for this year, while keeping our S$6.75b target for FY14F unchanged for now. KEP also recently announced that it will jointly develop, own and operate a yard facility in Mexico, in line with its "Near Market, Near Customer" strategy that we have always believed will put it in good stead to win new orders, especially with increasing focus on local content requirements. Besides more orders expected from Mexico, we also look to other growth areas such as West Africa, the Caspian Sea and the Gulf of Mexico. Our SOTP-based fair value estimate rises from S$12.53 to S$12.87; maintain BUY. (Low Pei Han) MORE REPORTS Ascendas REIT: Heading for another harvest We are positive that Ascendas REIT (A-REIT) will put up a firm showing in FY14, as it is likely to benefit not only from incremental rental income from The Galen and continued positive rental reversions, but also from the completion of its various investment projects. While the industrial property market was relatively static in 3Q13 amid uncertainty in the manufacturing economy, we understand that the demand in the high-tech and business park segments has continued to hold up well. Given A-REIT's significant exposure in these sub-markets, we believe A-REIT is in better position to shield off any fatigue in the industrial rental market. Maintain BUY and S$2.45 fair value on A-REIT. (Kevin Tan)

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