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Keppel Corporation (KPELY)
OTHER OTC:KPELY
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Keppel
(OTC:KPELY)
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Rating:66Neutral
Price Target:
$22.00
▲(34.15% Upside)
Action:DowngradedDate:02/06/26
The score is driven by strong technical momentum and a constructive earnings-call outlook with clear strategic targets and improving recurring earnings, partially offset by weaker underlying financial quality (historically poor cash conversion and meaningful leverage) and a relatively high P/E despite only a moderate dividend yield.
Positive Factors
FUM and Asset Management Momentum
Sustained FUM growth and a large deal pipeline build a durable, fee‑based revenue stream. Higher recurring asset management fees (and a multi‑year pipeline) reduce reliance on project cycles, improving revenue predictability and supporting long‑term earnings resilience.
Infrastructure recurring earnings and long‑term contracts
Strong, contract‑backed infrastructure earnings and long‑dated supply contracts create stable, predictable cash flows. Multi‑year tenors and growing decarbonization EBITDA support margin sustainability and reduce cyclical exposure from the offshore/project businesses over the medium term.
Improving cash generation and disciplined capital returns
The 2025 rebound in operating and free cash flow, coupled with active buybacks and a monetisation‑linked special dividend policy, indicates management is converting asset sales and operational gains into shareholder returns and deleveraging capacity, if sustained, improving financial flexibility.
Negative Factors
Meaningful leverage
Leverage at parity with equity is sizable for a diversified conglomerate and raises interest‑rate and refinancing sensitivity. High debt amplifies earnings volatility from operating swings and asset monetisation timing, limiting capital flexibility for investment or sustained buybacks without continued asset sales.
Historically weak cash conversion
A multi‑year pattern of negative or weak free cash flow undermines internal funding for capex, dividends and debt reduction. Inconsistent cash conversion increases execution risk and makes the company dependent on asset monetisations to finance returns and shore up the balance sheet.
Large lumpy non‑core portfolio and legacy losses
A sizable divestment pipeline extending to 2030 creates timing and valuation risk that can produce earnings volatility. Combined with legacy O&M losses, this structural overhang can depress reported profits and require opportunistic, potentially suboptimal, asset sales to meet cash or capital targets.
Keppel (KPELY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$0.00
Dividend Yield3.27%
Average Volume (3M)1.88K
Price to Earnings (P/E)30.8
Beta (1Y)0.31
Revenue Growth1.15%
EPS Growth36.91%
CountryUS
Employees5,249
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)0.55
Shares Outstanding910,278,900
10 Day Avg. Volume1,289
30 Day Avg. Volume1,876
Financial Highlights & Ratios
PEG Ratio-1.53
Price to Book (P/B)1.74
Price to Sales (P/S)3.16
P/FCF Ratio32.75
Enterprise Value/Market CapN/A
Enterprise Value/Revenue10.84
Enterprise Value/Gross Profit34.75
Enterprise Value/Ebitda55.45
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Keppel Business Overview & Revenue Model
Company DescriptionKeppel Corporation Limited, an investment holding company, engages in the offshore and marine, property, infrastructure, and investment businesses in Singapore, China, Hong Kong, Brazil, and internationally. It constructs, fabricates, and repairs offshore production facilities and drilling rigs, power barges, specialized vessels, and other offshore production facilities; engineers, constructs, and fabricates platforms for the oil and gas sector; undertakes shipyard works and other general business activities; and procures equipment and materials for the construction of offshore production facilities. The company is also involved in the provision of offshore and marine-related, as well as self-elevating platforms owning and leasing services; sourcing, fabricating, and supply of steel components; ship repairing, shipbuilding, and conversion activities; ship owning business; chartering of ships, barges, and boats with the crew; property investment, management, and development activities; fund management business; golf club operations; hotel ownership and operation; development of residential properties; procurement of equipment and materials for the construction of offshore production facilities; development of district heating and cooling systems; power generation and supply, and general wholesale trade businesses; purchase and sale of gaseous fuels; distribution of IT products and retail sale of telecommunication products; and provision of fixed and other telecommunications services. In addition, it offers heavy-lift equipment and related services; project management and procurement, towage, financial, real estate investment trust management, and logistics and warehousing; and environmental infrastructure and solid waste treatment services, as well as develops renewable energy projects. The company was incorporated in 1968 and is based in Singapore.
How the Company Makes MoneyKeppel generates revenue primarily through its Offshore & Marine segment, which includes the construction and repair of offshore rigs, specialized vessels, and the provision of related services. Additionally, the Infrastructure segment contributes through the development and management of power plants, data centers, and environmental solutions. The Property segment earns revenue from residential and commercial property development and investment, while the Investments segment includes income from strategic partnerships and investments in various sectors. Key revenue streams are bolstered by long-term contracts with clients, strategic collaborations with other firms in the industry, and a focus on sustainability and innovation, which positions Keppel to capitalize on emerging opportunities in the market.
Keppel Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The call presents a largely positive operational and strategic picture for the New Keppel: strong New Keppel net profit growth (+39% to $1.1bn), meaningful FUM growth ($95bn, on track for $100bn), record Infrastructure recurring earnings, expanded data center power bank (>1 GW) and active asset monetization with shareholder returns materially increased (total dividend $0.47/share and 58.5% TSR). However, material near‑term headwinds remain from legacy and noncore items that depressed reported overall profit (overall net profit down 16% to $789m), losses related to legacy O&M and the M1 remeasurement, and the large $13.5bn noncore portfolio that must be monetized over time. On balance the fundamentals, recurring earnings growth, strong asset management momentum and capital returns outweigh the lowlights, though execution and timing of monetizations and resolution of legacy items are key risks to watch.Q4-2025 Updates
Positive Updates
New Keppel Net Profit Growth
New Keppel net profit rose 39% year‑on‑year to $1.1 billion (ex‑noncore/discontinued), reflecting broad‑based improvements across Infrastructure, Real Estate and Connectivity.
Strong Funds Under Management (FUM) Momentum
FUM increased from $88 billion to $95 billion at end‑2025, with $10.1 billion of new FUM added in 2025, a 5‑year CAGR of ~20%, and a $33 billion deal pipeline. Management remains on track for the $100 billion FUM target by end‑2026.
Infrastructure Delivers Record and Recurring Earnings
Infrastructure recorded record recurring earnings ($703 million) and infrastructure net profit of $803 million, up 18% YoY. Integrated power EBITDA was resilient at $661 million and decarbonization & sustainability EBITDA grew 32% YoY to $130 million, surpassing the prior $100 million target.
Improved Profitability Metrics for New Keppel
Return on equity for the New Keppel improved to 18.7% from 14.9% a year earlier. New Keppel net debt‑to‑EBITDA improved to 2.0x from 2.3x at end‑2024.
Recurring Income and Asset Management Growth
Recurring income (from asset management and operations) increased 21% YoY to $941 million. Asset management fees reached $453 million and asset management profit grew (management cited a 15% increase in one reference to $189 million).
Data Center and Connectivity Scale Ups
Data center power bank expanded from ~300 MW to over 1 GW in Asia‑Pacific (including a Melbourne site earmarked for 720 MW AI campus). At scale this >1 GW power bank could translate into approximately $10 billion of data center FUM. Bifrost cable began commercial traffic in Dec 2025; estimated O&M of about $200 million per fiber pair over 25 years.
Asset Monetization Progress and Capital Returns
Announced monetizations of ~$2.9 billion in 2025 and completed transactions with gross monetization value of ~$1.6 billion in 2025. Total monetization announced since Oct 2020 reached ~$14.5 billion. Company announced a $0.47 total dividend per share for FY2025 (ordinary + special), up 38% YoY, and a special dividend policy of ~10%–15% of gross value of completed monetizations.
Shareholder Value and Capital Management
Total shareholder return for 2025 was 58.5%. The company launched/has a $500 million buyback program (about $116 million deployed to date) and achieved $98 million in annual run‑rate cost savings toward a $120 million target by end‑2026.
Real Estate and Connectivity Segment Improvements
Real Estate segment net profit improved to $273 million from $107 million a year ago. Connectivity net profit rose to $175 million, up 17% YoY; connectivity asset management net profit rose 47% to $50 million driven by REIT acquisitions and fund closings.
Development Pipeline and Strategic Assets
Keppel Sakra Cogen (600 MW, hydrogen‑compatible) is on track to commence operations H1 2026 and is fully contracted for 2026–2027. Long‑term supply contracts in non‑power infrastructure rose by over $1 billion YoY to $7.1 billion, with tenors of 10–15 years.
Negative Updates
Overall Net Profit Decline due to Noncore/Discontinued Items
Reported overall net profit for FY2025 was $789 million, down 16% YoY from $940 million, primarily driven by a $222 million accounting loss and a $227 million discontinued operations net loss related to the proposed sale and remeasurement of M1's telco business.
Noncore Portfolio and Monetization Risk
Noncore portfolio for divestment remains large at approximately $13.5 billion and monetization is expected to be lumpy through 2030, exposing timing and valuation risk despite active monetization efforts.
Legacy O&M and Other Losses
Net loss from legacy O&M assets was $156 million in FY2025, driven mainly by interest costs attributable to legacy rigs and impairment of fixed assets. Investment & other activities posted a combined net loss (including a $47 million loss) and noncore portfolio net loss was $84 million.
Reduced Free Cash Inflow and Cash Timing Effects
Total free cash inflow for FY2025 was $611 million versus $901 million in FY2024; New Keppel free cash inflow was $177 million. FY2024 benefited from a one‑off consolidation of AssetCo cash (~$1.07 billion), which depresses comparatives.
Integrated Power Margin Pressure from Spark Spreads
Integrated power earnings were affected by softening spark spreads and lower contracted spreads; management noted volatility in spreads even while emphasizing long‑term contracting and a strategy to stabilize earnings.
Fair Value Softness in Some Geographies
The company recorded fair value and operating losses in certain property investments (notably some China assets), contributing to segment volatility and impairments in FY2025.
M1 Transaction Uncertainty and Accounting Impact
Sale of M1's telco business remains pending regulatory approval; an accounting loss was recognised already due to classification as a disposal group, introducing near‑term earnings noise until completion.
Limited Near‑Term Clarity on Buyback and Forward Guidance
Management declined to provide firm cadence for share buybacks beyond the program size and did not provide explicit forward guidance on FY2026 net profit, citing lumpy monetization and market volatility.
Company Guidance
Management reiterated clear targets and near‑term milestones: grow FUM from $95bn (end‑2025) to $100bn by end‑2026, achieve $120m p.a. run‑rate cost savings by end‑2026 (already $98m achieved), and substantially monetize a $13.5bn non‑core portfolio by 2030 (announced ~$2.9bn and completed ~$1.6bn in 2025; ~$14.5bn announced since Oct‑2020); capital actions include a $500m buyback program (>$116m/13m shares repurchased) and a dividend policy of ordinary payouts tied to New Keppel (FY25 ordinary cash dividend $0.34/sh, final $0.19/sh) plus special dividends of 10–15% of gross monetisation value (FY25 special ≈$0.13/sh, ~15% of $1.6bn). Operational guidance: Sakra Cogen to commence H1‑2026; Infrastructure has ~67% of power capacity contracted ≥3 years with $7.1bn of long‑term supply contracts (10–15 year tenor), record Infrastructure recurring earnings $703m (integrated power EBITDA $661m; decarbonization EBITDA $130m, +32% YoY), and management expects spark spreads to stabilise; Connectivity/data‑center goals include expanding powerbank from ~300MW to >1GW (including a 720MW Melbourne site) that could support ~ $10bn DC FUM, while Bifrost is expected to generate ~ $200m O&M fees per fiber pair over 25 years.Keppel Financial Statement Overview
Summary
Income statement shows a strong 2025 revenue inflection and generally solid operating profitability, but net income has been volatile. Balance sheet leverage is meaningful (debt roughly around equity), and cash flow quality is the key weakness with mostly negative FCF historically despite a notable improvement in 2025.Income Statement
Revenue has been fairly range-bound from 2021–2024, followed by a sharp acceleration in 2025 (annual revenue growth of ~92.6%), which is a clear positive inflection. Profitability looks generally healthy in most years, with solid operating earnings levels, but net income has been volatile (a loss in 2020 and an unusually high profit in 2023 that appears non-recurring given the much lower earnings in 2024–2025). Overall: improving top-line momentum and decent operating profitability, tempered by inconsistent bottom-line results.68
Positive
Balance Sheet
The company carries a sizable debt load (roughly $11–$12B in recent years) against equity of about $10–$12B, translating to debt levels around parity with equity (debt-to-equity near ~1.0–1.17 in 2020–2024). Equity remains positive and relatively stable, which supports balance-sheet resilience, but leverage is meaningful for a conglomerate and can amplify earnings/cash flow swings. Returns on equity were strong in 2023 but otherwise sit in a mid-to-high single-digit range, pointing to moderate balance-sheet efficiency outside of that spike.57
Neutral
Cash Flow
Cash generation has been the weakest area. Free cash flow is negative in most years (2020–2024), and operating cash flow has been low relative to reported earnings in several periods (including negative operating cash flow in 2021 and very low levels in 2023–2024). 2025 shows a clear improvement with positive operating cash flow (~$1.08B) and positive free cash flow (~$576M), but the multi-year pattern indicates uneven cash conversion and higher execution risk. The recent rebound helps, yet consistency is not proven.41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.06B | 5.98B | 6.60B | 6.97B | 6.62B | 6.61B |
| Gross Profit | 953.32M | 1.75B | 1.86B | 1.96B | 1.45B | 1.53B |
| EBITDA | 597.39M | 1.98B | 1.73B | 1.76B | 541.07M | 525.77M |
| Net Income | 383.39M | 800.11M | 951.72M | 4.08B | 938.22M | 1.03B |
Balance Sheet | ||||||
| Total Assets | 27.72B | 27.09B | 27.66B | 26.84B | 31.06B | 32.32B |
| Cash, Cash Equivalents and Short-Term Investments | 1.94B | 2.42B | 2.45B | 1.50B | 1.08B | 3.35B |
| Total Debt | 11.69B | 11.44B | 12.07B | 11.14B | 10.38B | 12.02B |
| Total Liabilities | 16.75B | 15.90B | 16.23B | 15.82B | 19.15B | 19.88B |
| Stockholders Equity | 10.62B | 10.86B | 11.16B | 10.31B | 11.58B | 12.06B |
Cash Flow | ||||||
| Free Cash Flow | -9.92M | 576.33M | -411.07M | -862.66M | -436.62M | -813.92M |
| Operating Cash Flow | 219.38M | 1.08B | 200.34M | 58.43M | 259.59M | -275.56M |
| Investing Cash Flow | -484.40M | -502.99M | 700.93M | -942.71M | -667.28M | 2.03B |
| Financing Cash Flow | -147.05M | -530.72M | 136.60M | 722.94M | -1.52B | -668.13M |
Keppel Technical Analysis
Positive
16.40
Price Trends
17.14
Positive
16.04
Positive
14.10
Positive
Market Momentum
0.96
Negative
69.13
Neutral
72.43
Neutral
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 16.4 is below the 20-day moving average (MA) of 18.60, below the 50-day MA of 17.14, and above the 200-day MA of 14.10, indicating a bullish trend. The MACD of 0.96 indicates Negative momentum. The RSI at 69.13 is Neutral, neither overbought nor oversold. The STOCH value of 72.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KPELY.
Keppel Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $8.96B | 27.10 | 20.41% | 0.63% | 1.23% | -22.77% | |
70 Outperform | $153.29B | 32.78 | 31.71% | 2.24% | 7.48% | 9.55% | |
66 Neutral | ― | 30.83 | 8.67% | 3.27% | 1.15% | 36.91% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
55 Neutral | $86.47B | 27.34 | 76.08% | 1.82% | -13.09% | -20.63% |
* Industrials Sector Average
KPELY
Keppel
19.97
10.30
106.47%
MMM
3M
167.06
24.21
16.95%
HON
Honeywell International
243.97
50.43
26.06%
VMI
Valmont
471.27
131.08
38.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.