Broker Name: DBS Group Research
Date of Report: 28 July 2026

Excerpt from DBS Group Research report.

Report Summary
Stock: Keppel Ltd (KEP SP)
Action: BUY
Target Price (12-mth): SGD 13.30
Last Traded Price: SGD 11.35

Key Highlights & Actionable Insights:

• BUY recommendation with a 12-month target price of SGD 13.30, implying 17% upside from the last traded price.
• Main investment idea: Keppel is transforming into a global asset manager, leveraging its developer/operator strengths in real estate, infrastructure, and green industrial assets.
• Growth Drivers:
  • Funds under management (FUM) are set to hit SGD 100bn in 2026 and targeting SGD 200bn by 2030.
  • Core earnings (excluding legacy O&M and discontinued ops) are projected to grow at an 8% CAGR over the next two years, driven by recurring fee income and asset returns.
• Monetisation of Legacy Rigs:
  • Keppel subsidiary RigCo is selling 6 operational oil rigs into a newly formed Keppel Offshore Fund (50:50 with Apollo), unlocking SGD 611mn in cash and reducing legacy asset risk.
  • Potential special dividend of 3.4–5.0 Singapore cents per share for FY26 from this transaction.
• Financial Quality Improvements:
  • Recurring income now 60–80% of group profit, up from 25–40% pre-2022.
  • Return on equity (ROE) target of 15% is being met, excluding non-core assets.
• Valuation:
  • Sum-of-parts (SOTP) valuation with key segments: Asset Management (18x PE), Property (25% RNAV discount), Infrastructure (13x PE), Connectivity (13x PE).
  • Upside driven 40% by earnings growth, 60% by valuation re-rating (P/BV from 2x to 2.3x).
• Risks: Slower AUM growth, asset revaluation losses, or impairment of non-core assets could impact forecasts.

Key Financials (2026F):

• Revenue: SGD 6,490mn
• Net Profit: SGD 1,092mn
• EBITDA: SGD 1,971mn
• ROE: 10.2%
• Dividend Yield: 3.1%
• P/BV: 1.9x

Summary:
Keppel Ltd is recommended as a BUY with a target price of SGD 13.30, driven by strong transition to global asset management, steady growth in recurring earnings, successful monetisation of non-core legacy assets, and robust financials. The re-rating potential and execution of its Vision 2030 strategy make it an attractive investment idea for investors seeking exposure to sustainable urban solutions and alternative assets.

Above is an excerpt from a report by DBS Group Research. Clients of DBS Group Research can access the full research report from the broker’s website: DBS Group Research research website