In addition, Keppel's Bifrost subsea cable system is now ready for service.
"With the fibre cable now physically completed and all construction risks extinguished, we believe that the potential sale of three of its remaining fibre pairs could drive KEP’s share price in the near term," says Loh.
For context, Converge paid US$100 million for the first pair in 2022 while the price for the second pair was not disclosed.
"While Bifrost has not transmitted its first byte of data yet, the asset is a timely reminder that Keppel has the ability to be a key player in the inception and ultimately the owner/operator of this one-of-a-kind AI-enabling asset," says Loh.
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However, in the latest development, Keppel is facing legal proceedings brought by Liberty Wireless, the holding company of the Circles.Life mobile operator, which leases network capacity from
Keppel's unit M1, which is being sold to Tuas, Australia-listed company that owns Simba.
"As expected, Keppel stated that these claims were unmeritorious and will vigorously defend them," he adds.
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Loh says he is applying a higher valuation multiple of 18x instead of 15x on Keppel's asset management business, to reflect the ongoing revaluation of this important business segment.
"With $91 billion in funds under management, $4.7 billion raised as at 1HFY2025, dry powder of $25 billion and a robust $39 billion deal pipeline across infrastructure, digital infrastructure, and real estate, Keppel’s platform scale appears to be increasingly comparable to global comparables such as Brookfield, KKR and Blackstone," says Loh.
Keppel shares gained 2.55% to change hands at $9.24 as at 10.37 am.
