Opinions
Darren Sissons
Keppel Corp Ltd.
KEP-SP
BUY
May 15, 2014
Stock price when the opinion was issued
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The leader in the offshore oil rig market. The current big driver is going to be the ultra-deepwater market. Have a $14 billion backlog that gives them visibility up to 2019. Have increased the dividend for 23 consecutive years. Also, have a small property business that builds apartments across Southeast Asia. Good balance sheet and very good management.
(BNN shows the symbol as KPELF-PK, but my search through Globe & Mail and Bloomberg could find nothing. However, our site does have this under KEP-SP and they are both about oil rigs, so am presuming it is the same company.) A conglomerate that is active in the offshore oil reconstruction and ship repair market. They also have a property business. Has increased its dividend for 24 consecutive years. Good balance sheet and excellent management. A long-term story.
Primary business is manufacturing offshore oil rigs and is best in breed. Headquartered in Singapore with some operations in the Philippines. Recently signed up a joint venture type of relationship with the Chinese so they could get access to that market. Companies have to pay them in advance to build their rigs which leads to a very, very strong balance sheet. The oil majors did make a lot of money last year so they are bringing back some of the Cap X spending which is slowing down the offshore oil rig market. Ultimately this is a 3-4 year supply management cycle that an oil major has to think about. Good track record of increasing dividends. Very cheap now.