Keppel (KPELY) AI Stock Analysis

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Keppel

(OTC:KPELY)

75Outperform

Keppel's overall stock score is driven by a combination of strong financial performance and positive earnings call sentiment. The company's stable operational foundation and attractive valuation metrics support the stock's potential. However, cash flow challenges and some technical indicators suggest caution. The highlights from the earnings call, especially growth in key segments, significantly bolster the score.

Keppel (KPELY) vs. S&P 500 (SPY)

Market Cap

$8.79B

Dividend Yield4.88%

Average Volume (3M)6.41K

Price to Earnings (P/E)13.5

Beta (1Y)0.51

Revenue Growth-4.78%

EPS Growth-77.14%

CountryUS

Employees5,249

SectorIndustrials

Sector Strength75

IndustryConglomerates

Share Statistics

EPS (TTM)0.78

Shares Outstanding910,278,900

10 Day Avg. Volume1,831

30 Day Avg. Volume6,412

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Keppel Business Overview & Revenue Model

Company DescriptionKeppel Corporation Limited, headquartered in Singapore, is a diversified global company operating in key sectors including offshore and marine, property, infrastructure, and asset management. The company designs and builds high-performance offshore rigs, builds and services sophisticated vessels, develops and manages residential and commercial properties, and provides solutions for sustainable urbanization. Its operations span across more than 20 countries, making it a significant player in the global market.

How the Company Makes MoneyKeppel Corporation makes money through a diverse range of business activities across its core sectors. In the offshore and marine sector, it generates revenue by designing, constructing, and repairing offshore rigs and vessels for the oil and gas industry. The property segment contributes through the development and management of residential, commercial, and mixed-use properties, primarily in Asia. The infrastructure division earns by providing environmental engineering solutions, energy, and logistics services. Additionally, the asset management arm generates income through investment management and fund administration services. Keppel leverages strategic partnerships and joint ventures to enhance its capabilities and expand market reach, further contributing to its earnings.

Keppel Financial Statement Overview

Summary

Keppel displays a robust operational foundation with stable profit margins and efficient operations. Yet, volatility in net income and revenue growth poses risks. The balance sheet reflects a balanced financial structure, albeit with some leverage risks. Cash flow challenges, particularly in maintaining positive free cash flow, suggest potential liquidity constraints, warranting careful monitoring.

Income Statement

Positive

Keppel shows a mixed performance with a consistent gross profit margin around 28% to 30% over the years. However, the net profit margin experienced significant volatility, peaking in 2023 due to a one-time income boost, but generally stable otherwise. Revenue growth was inconsistent, with a decline in 2021 and a slight recovery in 2023. EBIT and EBITDA margins remained relatively stable, indicating operational efficiency.

Balance Sheet

Positive

Keppel maintains a moderate debt-to-equity ratio, fluctuating around 1.0, indicating balanced financial leverage. The company’s ROE is strong, particularly in 2023, due to high net income, but less impressive in other years. Equity ratio remains stable, showcasing a solid equity base relative to total assets, though slightly decreasing over time.

Cash Flow

Neutral

Cash flow performance presents concerns with negative free cash flow across most years, signaling potential liquidity issues. Operating cash flow to net income ratio demonstrates inconsistency, with negative ratios in some years, highlighting cash flow challenges. However, there is a positive trend in free cash flow to net income ratio, indicating some improvement in cash conversion.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.60B	6.97B	6.62B	8.62B	6.57B
	Gross Profit
1.86B	1.96B	1.45B	2.02B	1.98B
	EBIT
1.22B	1.08B	1.19B	1.48B	659.32M
	EBITDA
1.73B	1.76B	1.48B	1.88B	450.91M
	Net Income Common Stockholders
951.72M	4.08B	938.22M	1.03B	-508.09M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.45B	1.50B	1.08B	3.35B	2.28B
	Total Assets
27.66B	26.84B	31.06B	32.32B	32.11B
	Total Debt
12.07B	11.14B	10.38B	12.02B	12.60B
	Net Debt
9.77B	10.27B	9.35B	8.69B	10.46B
	Total Liabilities
16.23B	15.82B	19.15B	19.88B	20.95B
	Stockholders Equity
11.16B	10.31B	11.58B	12.06B	10.73B
Cash Flow		Free Cash Flow
-411.07M	-862.66M	-436.62M	-813.92M	-282.00M
	Operating Cash Flow
200.34M	58.43M	259.59M	-275.56M	202.45M
	Investing Cash Flow
700.93M	-942.71M	-667.28M	2.03B	-274.10M
	Financing Cash Flow
136.60M	722.94M	-1.52B	-668.13M	712.66M

Keppel Technical Analysis

Technical Analysis Sentiment

Positive

Last Price10.45

Price Trends

50DMA

9.60

Positive

100DMA

9.64

Positive

200DMA

9.51

Positive

Market Momentum

MACD

0.17

Negative

RSI

59.69

Neutral

STOCH

82.10

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KPELY, the sentiment is Positive. The current price of 10.45 is above the 20-day moving average (MA) of 9.24, above the 50-day MA of 9.60, and above the 200-day MA of 9.51, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 59.69 is Neutral, neither overbought nor oversold. The STOCH value of 82.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KPELY.

Keppel Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HON	76 Outperform	$135.28B	24.19	33.01%	2.09%	6.31%	0.81%
KPELY	75 Outperform	$8.79B	13.53	7.95%	4.88%	-4.78%	-77.14%
VMI	74 Outperform	$5.69B	16.51	22.84%	0.84%	-0.57%	116.12%
GFF	70 Outperform	$3.24B	13.88	93.05%	0.97%	-2.47%	249.49%
MDU	68 Neutral	$3.50B	12.48	10.51%	3.00%	-22.50%	-32.26%
Sector *	63 Neutral	$4.23B	11.54	5.34%	209.77%	4.14%	-9.49%
CODI	63 Neutral	$1.29B	―	-4.98%	5.77%	6.77%	9.95%

* Industrials Sector Average

Performance Comparison

KPELY

Keppel

10.45

1.00

10.58%

CODI

Compass Diversified Holdings

17.19

-3.13

-15.40%

GFF

Griffon

68.11

0.03

0.04%

HON

Honeywell International

210.50

20.88

11.01%

MDU

Mdu Resources Group

17.14

3.59

26.49%

VMI

Valmont

293.22

50.72

20.92%

Keppel Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q4-2024)

% Change Since: 8.97%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Positive

Keppel's earnings call depicted a strong financial performance with significant growth in several segments, including Connectivity and Infrastructure. The company achieved substantial asset monetization and improved ROE. However, challenges remain with legacy O&M assets incurring losses and reduced earnings in the Real Estate segment. On balance, the highlights significantly outweigh the lowlights.

Q4-2024 Updates

Positive Updates

Strong Financial Performance

Keppel's net profit from continuing operations reached $1.06 billion in FY '24, a 5% increase from $1.02 billion in FY '23. Connectivity segment recorded a 45% earnings growth year-on-year. Asset management fees grew by 54% to $436 million, and funds under management rose from $55 billion to $88 billion.

Significant Asset Monetization

Keppel announced close to $7 billion in assets monetized since October 2020, with approximately $1.5 billion in 2024. Including the divestment of Keppel O&M, the total asset monetization to date is around $11.7 billion.

Improved Return on Equity

ROE from continuing operations improved to 10.1% in FY '24 from 7.9% in FY '22.

Infrastructure Segment Growth

Infrastructure earnings surged 4.9x from $137 million in FY '21 to $673 million in FY '24 due to strong recurring income.

Data Center and Connectivity Expansion

Connectivity earnings rose 2.5x from $74 million in FY '18 to $184 million in FY '24. Data center portfolio power capacity expanded 2.7x from 240 MW in 2018 to 650 MW in 2024.

Negative Updates

Legacy O&M Assets Loss

Legacy O&M assets and discontinued operations registered a net loss of $124 million in FY '24.

Real Estate Segment Challenges

Development and EPC earnings declined year-on-year, primarily due to decreased profits from property trading projects in China and Singapore.

Lower Fair Value Gains in Infrastructure

Infrastructure segment recorded lower fair value gains from sponsor stakes in private funds compared to the previous year.

Lower Divestment Gains

Divestment gains declined year-on-year due to fewer assets monetized in FY '24 as market conditions were not conducive.

Company Guidance

During the fiscal year 2024, Keppel achieved a net profit of $1.06 billion from continuing operations, indicating a 5% increase compared to the previous year, excluding impacts from legacy offshore and marine assets. Including these effects, the net profit was $940 million. The company reported a 45% year-on-year growth in earnings for its Connectivity segment and a 54% rise in asset management fees to $436 million. Keppel's funds under management surged to $88 billion, significantly up from $55 billion, driven by both organic and inorganic growth. The company also recorded a free cash inflow of $901 million, a substantial turnaround from a $384 million outflow the previous year. Return on equity improved to 10.1%, aligning with the company's asset-light strategy. Keppel continued its asset monetization journey, announcing close to $7 billion in assets monetized since October 2020, with $1.5 billion occurring in 2024, and setting an interim target of $10 to $12 billion by the end of 2026. Additionally, the company is focused on derisking its legacy offshore and marine assets, which included a carrying value of approximately $3.6 billion at the end of 2024. Keppel's restructuring efforts led to $70 million in recurring annual run rate cost savings, two years ahead of schedule, with further cost optimizations anticipated to yield an additional $50 million per annum by end 2026. The Board of Directors proposed a final cash dividend of $0.19 per share for FY '24, contributing to a total cash dividend of $0.34 per share for the year. Keppel's total shareholder return over the past three years was 34.8%, significantly higher than STI's 11.9%.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.