Keppel DC REIT (AJBU) AI Stock Analysis

• Market Cap: S$5.35B
• Dividend Yield: 4.27%
• Average Volume (3M): 7.12M
• Price to Earnings (P/E): 14.4
• Beta (1Y): 0.76
• Revenue Growth: 23.81%
• EPS Growth: 89.13%
• Country: SG
• Employees: 16
• Sector: Real Estate
• Sector Strength: 49
• Industry: REIT - Office
• EPS (TTM): 0.06
• Shares Outstanding: 2,257,031,500
• 10 Day Avg. Volume: 4,601,420
• 30 Day Avg. Volume: 7,124,458
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: S$2.62
• Price Target Upside: 11.28% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 70 Outperform
• Price Target: S$2.50 ▲(6.38% Upside)

Keppel DC REIT's overall stock score is driven by its strong financial performance, though tempered by neutral technical signals and moderate valuation. The company's robust revenue growth and profitability are its greatest strengths. However, the lack of bullish technical indicators and a low dividend yield for a REIT weigh on its appeal.

Positive Factors

Portfolio Management

KDCREIT has entered into an agreement to divest Kelsterbach Data Centre in Frankfurt, Germany, at a 28% premium compared to its valuation.

Rental Income Growth

Positive rental reversion for colocation leases in Singapore is expected to surge to 30-40%.

Strategic Partnerships

The REIT is expected to benefit from Keppel Group’s strategic framework agreement with Amazon Web Services across connectivity and energy sectors.

Negative Factors

Occupancy Rates

Portfolio occupancy eased marginally due to lower occupancy at SGP1 and divestment of Kelsterbach Data Centre in Frankfurt.

Rental Arrears

Rentals arrears continue to accumulate at the Guangdong DCs, with Bluesea owing over S$35mn in overdue rent and no clear timeline for payment.

Keppel DC REIT Business Overview & Revenue Model

Company Description

Listed on 12 December 2014, Keppel DC REIT is the first pure-play data centre REIT listed in Asia and on the Singapore Exchange (SGX-ST). Keppel DC REIT's investment strategy is to principally invest, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate related assets. As at 31 December 2020, its portfolio comprises 19 data centres strategically located in key data centre hubs. With an aggregate lettable area of approximately 2,089,085 sq ft, the portfolio spans 12 cities in eight countries across Asia Pacific and Europe. Keppel Telecommunications & Transportation Ltd (Keppel T&T), the Sponsor of the REIT, has also granted Rights of First Refusal (ROFR) to the REIT for future acquisition opportunities of its data centre assets. The REIT is managed by Keppel DC REIT Management Pte. Ltd.. Keppel Capital Holdings Pte. Ltd. (Keppel Capital) has a 50% interest in the Manager, with the remaining interest held by Keppel T&T. Keppel Capital is a premier asset manager in Asia with assets under management comprising real estate, infrastructure and data centre properties in key global markets. The Manager's key objectives are to provide the REIT's Unitholders with regular and stable distributions, as well as achieve long-term growth while maintaining an optimal capital structure.

How the Company Makes Money

Keppel DC REIT generates revenue primarily through the leasing of space in its data centers to tenants, including enterprises, cloud service providers, and IT service companies. The company earns rental income from long-term leasing agreements, which are typically structured with fixed rental rates and built-in rental escalations. Additionally, Keppel DC REIT may derive income from ancillary services provided to tenants, such as power supply, cooling, and maintenance services. Strategic partnerships and joint ventures with other real estate and data center operators can also contribute to Keppel DC REIT's earnings by enhancing its service offerings and expanding its property portfolio.

Keppel DC REIT Financial Statement Overview

Summary

Keppel DC REIT shows strong financial health with significant revenue and profit margin growth, supported by a solid balance sheet. Cash flow management is efficient, though there is room for improving EBIT transparency and aligning operating cash flow with net income.

Income Statement

Keppel DC REIT has demonstrated strong revenue growth, with a 13.7% increase from the previous year. The gross profit margin is solid at 74.7%, and the net profit margin has significantly improved to 96.9%. EBITDA margin is impressive at 126.4%, indicating robust operational efficiency. However, the absence of EBIT data limits a full profitability assessment.

Balance Sheet

The company shows a healthy equity position with an equity ratio of 60.8%. The debt-to-equity ratio is moderate at 0.51, indicating manageable leverage levels. Return on equity is strong at 8.9%, showcasing effective use of equity capital. The balance sheet reflects stability, although there is room for improvement in reducing debt levels.

Cash Flow

Keppel DC REIT's free cash flow grew by 37.2%, highlighting robust cash generation capabilities. The operating cash flow to net income ratio is 0.74, and the free cash flow to net income ratio is 0.63, suggesting efficient cash flow management. While positive, improvements are possible in aligning operating cash flow more closely with net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	370.73M	310.29M	272.92M	277.32M	271.06M	265.57M
Gross Profit	288.12M	231.94M	209.32M	225.68M	223.90M	222.07M
EBITDA	107.39M	392.32M	239.68M	235.83M	369.85M	217.75M
Net Income	169.82M	300.67M	118.53M	230.91M	313.66M	168.15M
Balance Sheet
Total Assets	3.99B	5.54B	4.01B	4.11B	3.78B	3.35B
Cash, Cash Equivalents and Short-Term Investments	164.33M	316.69M	149.73M	190.40M	195.94M	244.39M
Total Debt	1.42B	1.72B	1.48B	1.48B	1.30B	1.19B
Total Liabilities	1.58B	2.12B	1.65B	1.65B	1.44B	1.37B
Stockholders Equity	2.37B	3.37B	2.31B	2.41B	2.29B	1.94B
Cash Flow
Free Cash Flow	227.03M	188.33M	137.34M	178.87M	113.93M	175.43M
Operating Cash Flow	253.46M	223.74M	163.77M	218.29M	191.50M	234.98M
Investing Cash Flow	53.38M	-1.07B	-15.44M	-298.71M	-374.38M	-208.81M
Financing Cash Flow	-283.87M	1.00B	-188.60M	83.67M	134.97M	66.85M

Keppel DC REIT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:AJBU, the sentiment is Positive. The current price of 2.35 is above the 20-day moving average (MA) of 2.32, above the 50-day MA of 2.28, and above the 200-day MA of 2.15, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 51.53 is Neutral, neither overbought nor oversold. The STOCH value of 58.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:AJBU.

Keppel DC REIT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AJBU	70 Outperform	S$5.35B	14.36	10.81%	4.27%	23.81%	89.13%
Sector *	65 Neutral	$2.10B	15.81	3.79%	4.98%	4.78%	6.63%
MAPGF	―	$4.86B	34.25	2.72%	6.31%	―	―
MAPIF	―	$4.60B	17.54	6.88%	6.40%	―	―
DCRU	71 Outperform	$678.09M	3.42	20.33%	7.05%	36.48%	―
CMOU	58 Neutral	$245.45M	―	-2.12%	24.56%	-1.55%	78.22%
BTOU	47 Neutral	$136.80M	―	-48.17%	―	-27.66%	-106.71%

Keppel DC REIT Corporate Events

Keppel DC REIT Updates Trustee’s Registered Address

Keppel DC REIT has announced a change in the registered address of its trustee, Perpetual (Asia) Limited, to a new location at 38 Beach Road, South Beach Tower, Singapore. This administrative update does not affect the office address of the trustee, which remains at 16 Collyer Quay, Singapore. The change is part of routine updates and does not have a direct impact on the operations or market positioning of Keppel DC REIT.

The most recent analyst rating on (SG:AJBU) stock is a Buy with a S$2.50 price target. To see the full list of analyst forecasts on Keppel DC REIT stock, see the SG:AJBU Stock Forecast page.

Keppel DC REIT Joins Straits Times Index, Boosting Investor Visibility

Keppel DC REIT will be included in the Straits Times Index (STI) from 23 June 2025, a move expected to enhance its visibility among investors. This inclusion reflects the REIT’s strong financial and operational performance, driven by the rising demand for data centers due to increased cloud adoption and digitalization. The REIT has delivered substantial returns to unitholders since its IPO, and its inclusion in the STI is likely to further solidify its position in the market.

The most recent analyst rating on (SG:AJBU) stock is a Buy with a S$2.50 price target. To see the full list of analyst forecasts on Keppel DC REIT stock, see the SG:AJBU Stock Forecast page.

Keppel DC REIT Reviews FY2024 Performance at AGM

Keppel DC REIT held its Annual General Meeting at the Suntec Singapore Convention and Exhibition Centre, where the CEO presented the portfolio performance for FY2024. The meeting included a review of financial statements and resolutions were voted on electronically, reflecting the company’s commitment to transparency and stakeholder engagement.

The most recent analyst rating on (SG:AJBU) stock is a Buy with a S$2.50 price target. To see the full list of analyst forecasts on Keppel DC REIT stock, see the SG:AJBU Stock Forecast page.

Keppel DC REIT Issues Units for Management Fees

Keppel DC REIT has issued 764,903 units at S$2.1774 per unit as payment for its management fees for the first quarter of 2025. This issuance covers fees for its interests in multiple data centers, reflecting the trust’s strategy to manage costs and align management incentives with shareholder interests.