Wednesday, June 29, 2011

Keppel Telecom

Keppel Telecom: Following DBSV initiation last week, CIMB initiates coverage on at Outperform with a$1.57 TP. Note that recent data-centre visit and discussions with mgt have strengthened conviction in KPTT's clear strategic direction for its data-centre and logistics operations. House add that KPTT's share price has risen 5.7% in the last two wks, however, stress that the stock is still undervalued, trading below industry's and its historical forward average….

Add that excluding contributions from M1, the stock trades at a mere 4.7X CY12 EPS; SOP valuation suggests a value of $1.57, offering 21% upside from current valuations. Expect re-rating catalysts from major acquisitions and contract wins.

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