Broker: CGS International
Date of Report: July 28, 2026
Excerpt from CGS International report.
Report Summary
Stock Focus: Keppel Ltd (KEP SP)
- Action: ADD (Buy) – Recommendation unchanged
- Target Price: S\$13.52 (Current price: S\$11.35; Upside: 19.2%)
- Key Call to Action: Keppel Ltd’s share is rated Add with a 12-month target price of S\$13.52, suggesting a positive outlook and further upside potential.
Key Highlights:
- Keppel is on track to meet its S\$2bn-3bn FY26F non-core asset monetisation target after divesting six operational jackup rigs for S\$1.2bn, in partnership with Apollo’s managed funds.
- Total year-to-date (YTD) announced asset monetisation is S\$1.6bn, with realised divestments estimated at around S\$1bn. This is likely to result in a special dividend per share (DPS) of S\$0.05–0.08 (10–15% payout).
- Full-year 2026 forecasted DPS is S\$0.45, comprising ordinary DPS of S\$0.34 and special DPS of S\$0.11.
- Net gearing for FY26F is expected to improve from 81% to 76% if 70% of the S\$1bn proceeds are used for debt repayment, leading to interest savings and 2–3% EPS accretion per annum.
- Further catalysts: Potential resumption of talks for M1 divestment, further property asset sales, and new cable system development.
- Downside risks: Slower asset monetisation or unplanned power plant shutdowns.
Key Financials:
- 2026F Net Profit: S\$1,042m
- 2026F Normalised EPS: S\$0.57
- 2026F Dividend Yield: 3.96%
- 2026F Recurring ROE: 9.9%
Implications:
- Keppel’s active asset monetisation and integrated asset manager model support sustainable dividends and potential stock re-rating.
Above is an excerpt from a report by CGS International. Clients of CGS International can access the full research report from the broker’s website.
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