Keppel Corp: CLSA has a rpt reiterating its Sell call with TP of $6.91, as the market has not yet priced in the severity of the downturn in the O&M segment.
Year-to-date order wins stand at $330m, just 11% of the street's full year expectations of $3-4b.
Net orderbook as of 1Q15 was $11.7b, of which ~$7b will be recognised in 2015, implying 2016/17 revenues will likely fall off a cliff. With its O&M orderbook shrinking rapidly, margins are expected to follow due to operating leverage.
In addition, Keppel’s property segment which represents 64% of CLSA's is not really cheap on a valuation basis, trading at 20% discount to RNAV and in line with other Singapore-focused developers.
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