Stock Analysis: Kep Infra Tr | Lianhe Zaobao
Kep Infra Tr is initiating coverage with a buy recommendation and a target price of HKD 0.55, closing price at HKD 0.465. The trust's assets are diversified, covering energy, environmental services, and other sectors, with stable cash flow linked to inflation. Recent positives include the acquisition of a global maritime group and a clear digital infrastructure strategy. Risks include contract renewals, regulatory, and political uncertainties. Expected yield is relatively high, with a target price upside potential of 19%
Keppel Infrastructure Trust
- Recommendation: Buy (Initiating Coverage)
- Target Price: SGD 0.55
- Closing Price: SGD 0.465 (-1.06%)
The assets under this trust are diversified key infrastructures spanning energy, environmental services, distribution, and storage, supported by robust cash flows linked to inflation. Based on Keppel Group's operational capabilities and predictable transaction channels, the trust also has the conditions to achieve steady growth. However, the expected yield of 8.6% to 8.7% seems a bit high given its risk profile.
Recent favorable factors for the trust include the acquisition of Global Marine Group to enter the subsea cable business and the trust's further clarification of its strategic planning for digital infrastructure. Additionally, contract extensions in Singapore can also support revenue growth. On the risk side, attention should be paid to factors such as contract renewals, regulation, and political uncertainties. This is our first coverage of the stock, and we give it a "Buy" rating with a target price of SGD 0.55, expecting an upside potential of 19%. (OCBC Research)
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