Keppel Corp Review

I am invested in Keppel Corp and just managed to sit down and read through their 2014 financial report. Slow? Yes, but better late than never. We all know the macro trends affecting Keppel Corp, oil prices are down. but is it a good time to buy Keppel Corp?

Keppel Corp statistics:

1. Revenue: 13.3 B increased by 7% 

2. Net Profit: 1.8 M increased by 2% 

3. EPS: 1.04 increased 2%

4. NAV = 5.73 increased 7%

KepCorp derives income from three main groups:

1. O&M 8.5B revenue (60%)

2. Infrastructure  3 B revenue (20%)  

3. Property 2 B revenue  (10%)

Good spread of international markets:

1. singapore

2. NA

3. Europe

4. SA

Within the three main groups, O&M and Property is heading into some difficult times. Although Infrastructure is on good ground and I am confident of its prospect, it only contributes to 20% of Keppel Corp's revenue. (note to self: perhaps i should be investing in Keppel Infrastructure Trust or Keppel T&T directly or Keppel DC Reit).

View: 

- to continue regular investment into Keppel Corp via PSB since i am not confident if this is the lowest point for Keppel Corp

- to consider purchasing Keppel DC reit or Keppel T&T directly as industry has potential

SATS

SATS is a stock that is defying market trend lately. In a sea of red, it is one of the few shares that is green, and seemingly rising above market odds. In fact, fool.sg recently did a short write up on this stock.

Since I have SATS in my portfolio, the pressing question is always: 1) buy 2) hold or 3) sell. SATS is mainly in the Gateway Services and Food Solutions Business.

Pros:
1. Good dividends payout (3.9%)
2. High cashflow
3. Divested across APAC markets - JP, BJ, MC, TW
4. little competition in Singapore
5. Joint Venture with a leading meat processing company
6. CEO ex HSBC - should be good in managing cash flow and has proven so by managing cost
7. changi airport expansion in 2018 and 2025
8. Investment in high tech transportation of vaccines

Cons:
1. P/E ratio = 20.3
2. pressure from airline industry
3. bad reviews from glassdoor - low employee morale
4. rising labour cost
5. Revenue decreasing trend due to Food Solutions bringing in less revenue. Gateway solutions have not increased to offset fall.

A pretty mixed bag but pros seems to out weigh the cons. i vote hold and purchase more when price drops. However, if price continue increasing then i would consider selling and waiting as i don't quite like buying into high P/E stocks.

What i really like about this stock is : 1) management is moving into high tech transportation business 2) joint venture shows potential for growth