Adrian Loh of UOB Kay Hian has raised his target price for Keppel from $11.70 to $13.23, following what he calls a " strong" set of FY2025 numbers, where the company pleased shareholders with higher dividends, along with guidance for more.

For the year ended Dec 2025, the company' s net profit from continuing operations rose 39% y-o-y to $1.1 billion, thanks to stronger recurring income, plus higher contributions across its three core operating segments.

The bottom line, however, was weighed down by an accounting loss from the sale of M1' s telco business which Keppel has booked, even before the deal is completed.

Loh notes that Keppel' s ROE has improved " meaningfully" by 3.8ppt to 18.7%, a sign of improved capital efficiency and continued successful execution of its asset-light strategy.
For FY2025, Keppel plans to pay a total dividend worth 47 cents per share, an increase of 38% y-o-y. Besides a final cash dividend of 19 cents, Keppel will be distributing one Keppel REIT unit for each six Keppel shares worth 11 cents, plus another 2 cents cash.

In addition, the company has guided that it will be paying out special dividends equal to 10 to 15% of its ongoing asset monetisation.

Loh figures that with $13.5 billion of non-core assets that are likely divestment candidates, that is equivalent to 74 cents to $1.11 that can be paid on top of Keppel' s normal dividend. " Sharing is caring," says Loh.

Loh has upgraded his earnings estimates for FY2026 by 3% and FY2027' s by 5%, to take into account slight operating profit margin expansion in its infrastructure segment as well as lower costs due to visible improvements in Keppel' s cost control.

His new target price of $13.23 is based on a target multiple of 18x, which is a 25% discount to its global asset management peers that have a greater reach in scale and geography, deeper liquidity and longer track record.

Keppel shares changed hands at $11.54 as at 9.26 am, down 0.69%. It is up 70% in the past year.