Keppel Corp: CS thinks property will unlikely be a boost to Keppel Corp, as Keppel Land sales volumes should remain lacklustre in the near term. Vietnam (8% of GAV is a bright spot), while China residential (40% of GAV) to weaken in 2016e due to oversupply.
The house also thinks there are limited capital recycling opportunities for its investment portfolio, as major investments in China and Indonesia are expected to be completed 2017 and beyond. This will likely cap upside to revaluations and divestmetns, which have been a boost to group profit in recent years.
The house reduced SOTP based TP to $7.50 (from $8.20), valuing KepLand at 30% discount to RNAV. The house is Neutral on Keppel Corp
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