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 nine 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.
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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.
