Keppel Corp

Keppel Corp: 1Q11 results above consensus.
Net profit at $346m, +7.8% yoy. The surprise came mainly from the O&M Ebit margins which stayed high at ~21% (vs estimates of 15%), despite the lower qoq mix of supposedly higher margin pre-crisis orders. In addition, Property grew 14% yoy to $167m, and Infrastructure grew 38% yoy to $51m, recovering from the difficulties and write-downs of its Qatar project in 4Q10…

KEP’s O&M order book momentum has been strong, with ytd order wins totaling $5b. Current orderbook stands at $7.5b, up 63% from Dec ’10 total of $4.6b.
Consensus FY11E new order estimates now lifted to ~$7.5b. A number of analysts have also upgraded (O&M) margin forecasts, on view that post-crisis order margins likely better than previously expected.
The majority of Street has revised TP upwards, keep Buy/ Outperform ratings.
Post results, Street TP range btwn $13.42 – 15.60