Stock Target Price - Updated Target Price for K-REIT by DBS following Q1 2010 results

Updated Target Price and Recommendation for K-REIT following release of Q1 2010 results:
DBS HOLD S$1.17

Latest updates at Stock Target Price.

Financial News - 20 APR 2010: Quarterly Earnings Report for Keppel Land

First quarter 2010 results for Keppel Land:

• Full Report

Key Points

• First quarter net profit surged 75.3 per cent on-year to S$64.7 million. 
• Revenue rose 9 per cent to S$158.8 million for the three months ended March 31. 
• Net profit from its property trading arm grew 53.6 per cent to S$48.7 million. 
• Net profit from property investment by 29.2 per cent to S$12.4 million from a year ago. 
• Fund management profit up 60.9% on higher fee income from K-Reit Asia and Alpha Investment Partners.

Author's Note
The EPS for the latest quarter is 4.5 cents. Latest NTA is $2.43.

Financial News - 19 APR 2010: Quarterly Earnings Report for K-REIT

First quarter 2010 results for K-REIT:

• Press Release
• Financial Statements
• Presentation Slides

Key Points

• Net property income increased 28.4% year-on-year to $13.9 million, due mainly to higher rental income.
• Distributable income rose by 13.8% year-on-year due mainly to higher net property income and contribution from One Raffles Quay Pte Ltd. 
• DPU for January to March 2010 amounted to 1.33 cents.
• Portfolio committed occupancy of 96.0% as at 31 March 2010 is higher than Core CBD occupancy of 91.9%. 
• Aggregate leverage lowered to 25.2% as at 31 March 2010 on enlarged asset base. 
• Acquisition of 275 George Street in Brisbane, Australia enlarged portfolio asset size to $2.3 billion and net lettable area to 1.5 million square feet. 

Author's Note
There will be no distribution payment this quarter as K-Reit distributes semi-annually. The DPU of 1.33 cents will be paid in the next quarter together with the DPU for the next quarter.


Base on the latest closing price of 1.130 for K-Reit on Apr 19, the annualized yield for the DPU of 1.33 cents is 4.7%. This is relatively lower than the other office Reits. But the gearing of the Reit is low at 25.2%, and the new Australian property has only contributed 1 month of rental revenue for the quarter. The cash flow statement in the latest quarterly report also shows that the Reit still has about S$340.3 million of cash and cash equivalent mainly from its rights issue last year that has yet to be deployed.

Stock Target Price - Updated TP for Keppel Corp by AMFraser following acquisition of Shipyard in Brazil

Updated target price of Keppel Corp by AMFraser following acquisition of Shipyard in Brazil:
Recommendation: Buy 
Target Price: S$10.65

Latest updates at Stock Target Price.

Financial News - 14 APR 2010: Keppel fortifies market leadership in Brazil with new shipbuilding yard

Keppel fortifies market leadership in Brazil with new shipbuilding yard. See press release and related report.

Key Points

• Keppel Offshore & Marine Ltd (Keppel O&M), through its wholly-owned Brazilian subsidiary, Navegantes Maritime Construction and Services, has entered into an agreement with Brazil’s TWB Group to acquire the Estaleiro TWB shipyard in Navegantes, Santa Catarina.
• This 7.6-ha shipyard will be operated by Keppel O&M’s specialised shipbuilding arm, Keppel Singmarine. It has a 300-metre long waterfront and is equipped with a slipway, pipe and hull shops and an outfitting quay. Keppel O&M’s total investment in the yard, including further capital expenditure to upgrade and modernise the facility, will be in the region of about US$50 million.
• The new yard is expected to be operational by the second half of 2010. At full capacity, it is estimated to be able to complete an average of eight vessels a year.

Author's Note
Previously Petrobras has announced plans to charter some 147 locally-built Offshore Support Vessels over the next five years. The new shipyard will help Keppel to meet the demand for works to be carried out locally in Brazil.