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Keppel Corp
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Keppel Corp
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lifeisgood
Supreme |
06-Dec-2023 13:45
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Is Keppel buying an " Ang Moh" company Aerwont Capital a good move? It seems to make financial sense, profit wise, boost to its AUM , etc etc. But what I am concerned about is Singapore Inc past poor track record of buying a Western company, and then having trouble with culture assimilation, different pay scales and perhaps other management issues (Singaporeans managing ang moh ...). We will find out in the future whether such " cultural" issues exists. | ||||
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pursuer76
Veteran |
05-Dec-2023 08:30
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Price still holding well despite SCI dropped over 30 cents yesterday. Hope it will continue it' s upward trend and SCI and will recover from yesterday' s disaster soon. | ||||
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CaiShenDao
Member |
04-Dec-2023 16:39
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Stay tuned. NASA rocket will come! :)  This couple of weeks... Akan Datang  Huat Ah!  |
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pursuer76
Veteran |
04-Dec-2023 13:23
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Market depth shows 87% sell volume and only 13% buy volume. Pathetic. Kena humtum left right up down by shortsellers? Or sellers? | ||||
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vicloo
Elite |
04-Dec-2023 12:41
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Profit taking for those short term trade bought recently under 6.8, hope after lunch cheong back up.
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CaiShenDao
Member |
04-Dec-2023 12:09
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LAI LIAO LAI LIAO la.. akan datang... this week and next... standby sit rocket - year end huat! https://www.marketscreener.com/quote/stock/KEPPEL-CORPORATION-LIMITE-6492087/consensus/  Outperform. Avg TP by 10 analysts: $7.74 Highest TP by UOB: $9.09 |
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pursuer76
Veteran |
04-Dec-2023 11:57
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How come gostan after 6.95? C' mon, vroom vroom...
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CaiShenDao
Member |
04-Dec-2023 09:51
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You guys know what is CaiShenDao your doorstep?  Watch Keppel. Huaaaaaaaatttttt Ahhhhh!!! KeepCalm& CarryMe x) CaiShenDao |
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vicloo
Elite |
04-Dec-2023 09:32
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Marching steadily towards lucky 7 today, hope close above 7 today 👍 👍 👍 | ||||
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Joelton
Supreme |
02-Dec-2023 11:36
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Keppel&rsquo s purchase of European asset manager Aermont to bring growth benefits: Analysts
 
SINGAPORE - Keppel Corp&rsquo s purchase of a 50 per cent stake in leading European asset manager Aermont Capital is a strategically savvy move which will catapault the Singapore company to the higher ranks within the league of global asset managers.
 
That seems to be the emerging view of some analysts following the mainboard-listed company&rsquo s announcement that it had sealed the lead to buy 50 per cent of Aermont Capital for up to &euro 356.855 billion (S$520 million), and would pick up the remaining 50 per cent by 2028.
 
&ldquo We are positive on the acquisition, which leapfrogs Keppel&rsquo s asset management capabilities and geographical reach,&rdquo wrote Mr Foo Zhiwei of Macquarie Equity Research. &ldquo The deal is highly strategic. Accretion appears small at the onset, but can be as much as $94 million by 2030 as FUM (funds under management) is fully deployed and scales.&rdquo
 
Mr Foo has an &ldquo outperform&rdquo call on Keppel, with a 12-month price target at $7.88.
 
The stock closed at $6.85 on Dec 1.
 
UOB Kay Hian was even more upbeat.
 
&ldquo Keppel&rsquo s acquisition of top-ranked Aermont Capital, which has a major European real estate presence, arguably puts the company into the league of global asset managers,&rdquo wrote analyst Adrian Loh. &ldquo This acquisition will deliver growth as well as investor and geographic diversification. How the combined entity takes advantage of the macro and real estate issues in Europe over the next five years will be worth watching.&rdquo
 
The investment house has a &ldquo buy&rdquo call on the stock with a target price of $9.09 - an almost 33 per cent upside to its closing price on Dec 1.
 
Announcing the deal - which will be funded by cash and treasury shares - on Nov 29, Keppel said Aermont would bolster the Singapore company&rsquo s recurring income and funds under management (FUM), which is projected to grow by $24 billion to over $77 billion from the current $53 billion.
 
On a pro forma basis, had the acquisition been effective on Jan 1, 2022, earnings per share for Keppel would have been 52.4 cents versus 52.1 cents actually achieved. Recurring income would have risen to $512 million versus $503 million, while net tangible assets per share of Keppel would have increased to $5.50 from $5.49. Keppel added that the acquisition would have minimal gearing impact on a pro forma basis.
 
Aermont, which has a 16-year track record and enjoyed a gross internal rate of return of 25 per cent, is one of the largest owners of real estate on the European continent, operating in 10 cities across Europe.
 
Its investments include assets and businesses in the office, student accommodation, workforce housing, luxury hospitality and production studio infrastructure sectors. 
 
Aermont is ranked the highest among Europe-based real estate firms in terms of funds raised in the last five years.
 
&ldquo We view the deal as highly strategic,&rdquo the Macquarie report added. &ldquo Price tag aside, it is an acqusition of 1) talent, 2) capabilities, 3) geographic presence, 4) clientele access, and 5) a top mid-sized asset manager in Europe. The acquisition leapfrogs Keppel&rsquo s asset manager capabilities by years. We think this justifies the implied valuation of 13x EV/EBITDA, which is already attractive vs peers.&rdquo
 
EV/EBITDA is a measure of enterprise value, or the company&rsquo s total value, against earnings before interest taxes, depreciation and amoritsation.
 
Meanwhile, UOB Kay Hian noted that apart from launching Keppel into the European real estate space, the deal also expands the company&rsquo s network of blue chip institutional investors or limited partners (LPs) with eight of Aermont&rsquo s 15 largest LPs being new to Keppel.
 
&ldquo Clearly, given the longevity of Aermont&rsquo s track record, this deal also adds a number of senior fund managers to the company,&rdquo the research house added.
 
Macquaries sees Keppel re-rating as it transforms into a global alternative asset manager.
 
&ldquo As recurring fee income grows alongside assets under management growth, we expect ROE (return on assets) to improve, driving the P/B (price-to-book) multiple re-rating. Capital recycling remains key which underpins the dividend yield of about 5 per cent.&rdquo
 
Announcing the deal on Nov 29, Keppel CEO Loh Chin Hua described the acquisition as a transaction of growth which will be immediately earnings accretive and significantly expand Keppel&rsquo s footprint beyond the Asia-Pacific.
 
&ldquo The acquisition of an initial 50 per cent stake in Aermont, with a pathway to an eventual 100 per cent ownership and full integration, marks a major strategic step forward in Keppel&rsquo s ambition to be a global asset manager and operator, availing us of a highly attractive European platform with strong recurring fees and a premium network of partners.&rdquo
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CheeryVGoh
Supreme |
01-Dec-2023 16:53
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We highlight a portion of Keppel Corp&rsquo s ($6.67, up 24 cents) Q& A on their latest proposed acquisition of Aermont Capital. We recommend investors to read the full document in its entirety on SGX Q: What is the asset class split, in terms of say commercial versus industrial, hospitality? A: We are very opportunistic, but the split I can give you is that approximately half the investments we have made are in what I would call pure, traditional real estate investments, property investments, i.e., ground-up developments, restructuring, etc., and half in operational platforms. As I mentioned before, from the very beginning of the existence of Aermont, in Fund I to Fund V, we have very spectacular developers, in The Student Hotel or Pinewood, obviously. Now, because we are opportunistic, we do not have a preference for any asset class, except where we believe the best risk-adjusted returns can be achieved. So, therefore we are moving on together and we believe that Fund V will offer greater opportunities in a dislocated market Q: What is the fee-to-FUM ratio? What is the EBITDA margin? A: 40 plus. We are streamlining the team and investing in people to enable the growth Q: Can you let us know the percentage split of the base recurring fees, as well as the carry of performance fees of Aermont? A: I think the way that we have agreed with Aermont on the transaction is that we are buying the recurring income. So, the carried interest from the funds that are currently existing, they are already in most founders&rsquo platforms shared by the team, both the founders as well as the investment team. For PGV, Keppel will have, I believe, a 20% stake, but because we also did not pay for the carried interest, I think this is a very fair outcome. Of course, going forward, in new funds to be created, Keppel will, I believe, retain about 30% of the carry. The majority, 70% of the carry, will be shared with the team and this is really one of the key ways to incentivise and also retain talent in a platform like Aermont, which is very much into opportunistic investing. Q: Can you provide us with the IRR that Aermont has achieved from Fund I to Fund IV over the years? A: To share more on what Chin Hua just said, to be more technical in terms of the way analysts look at fund managers, I would say that the fee basis of Aermont today, which is being sold at 50% stake, is 100% of what we call FRE or fund-related earnings. So, there is no carried interest in the account for the reason that Chin Hua explained. It is 100% FRE, so the best quality earnings we can have. No carry, and no investment income either, because the co-investors in the different funds have been made by the partners and some members of the team, and we keep that. So, the alignment of interests with our LPs remain unchanged. The partners and members of the team will keep 100% of their coinvestments and also their carry, except probably for future funds. So that is one absolutely key point. Q: Can you share how long is the tenure of Aermont&rsquo s funds and when typically is the end of life, if any, for these funds? A: In terms of the tenure of our typical funds, Fund I to V, we generally have an investment period of four years. We then have a further five years to harvest those investments, so in total we have nine years. We have the ability to extend beyond that for a further two years if necessary. But that is an extension, for which we would need to get our LPs&rsquo approval. Keppel Corp&rsquo s market cap stands at S$11.3bln and currently trades at 7.5x forward PE and 1.1x PB, with a dividend yield of 5%. Consensus target price stands at S$7.52, representing 12.7% upside from current share price. We continue to like Keppel&rsquo s move towards being a global organization, which would help to minimize country/region risk going forward. We continue to maintain an Accumulate rating on Keppel given its attractive 17% potential upside to consensus target price of $7.52 and over 5% dividend yields (not counting specials such as distribution in species of Keppel REIT and Semb Marine) | ||||
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finjungle
Member |
01-Dec-2023 16:10
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Hope due diligence properly executed. Hopefully senior team members do not leave. Also,hope excess premium not paid! Hope LCH is wiser than most!
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seanpent
Supreme |
01-Dec-2023 15:50
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holding on tightly
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pursuer76
Veteran |
01-Dec-2023 15:15
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https://www.businesstimes.com.sg/companies-markets/keppels-acquisition-aermont-deliver-growth-and-diversification-benefits-analysts | ||||
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CaiShenDao
Member |
01-Dec-2023 13:38
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Ji Pai Confirm Huat dua dua liao lah!! :D CaiShenDao!! Ni De Jia Men Kou! :D   |
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FATABA
Supreme |
01-Dec-2023 12:05
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" " " deal as highly strategic.  Price tag aside, it is an acquisition of 1) talent, 2) capabilities, 3) geographic presence, 4) clientele access, and 5) a top mid-sized asset manager in Europe.  The acquisition leapfrogs KEP' s asset manager capabilities by years." " As expected, first analyse comment ......expecting more upgrade on Kep Corp in coming mths.  Funds are definately on this counter.  DYODD
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Louistan
Member |
01-Dec-2023 11:58
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It is still property related and in Europe . KC can' t be moving up just based on this deal as actually it signals KC is running out of ideas.
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Observers
Elite |
01-Dec-2023 11:02
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i like this deal. open doors for founder/partner-centric fums. can complement insti-centric fums and create synergy between the two. | ||||
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FATABA
Supreme |
01-Dec-2023 10:37
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u are right ......The right CEO/Man at the right place and the right time ( cutting of KOM , restructuring w programs ) are the right actions  that changes Kep into the Post pandemic future. ( dirty energy into the green world ) .  Lucky we do still have some of  these able man to lead Spore / like Kep and DBS /OCBC ......however the reverse can be seen in Singtel  Happy investing 
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CaiShenDao
Member |
01-Dec-2023 10:36
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HengOngHuatah!!! first target $8.88 LAI $12.88, $15.88, $18.88 :D sit rocket liao Jin Happy makan free KReit yummy and CDs much more to come!! Huat Ah! 888! CAISHENDAO xD ! |
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