Keppel Telecommunications & Transportation

Notice of Dates for Keppel Group's Full Year 2011 Financial Results

The Keppel Group of Companies is pleased to announce its full year 2011 financial results on the following dates:

* K-Green Trust on 17 January 2012
* K-REIT Asia on 17 January 2012
* Keppel Telecommunications & Transportation Ltd on 18 January 2012
* Keppel Land Limited on 19 January 2012
* Keppel Corporation Limited on 26 January 2012

This notice will be updated should there be any amendments.

Vested in Keppel T & T.

Expecting very good results for Keppel TT this full financial year on the back of M1's improving results and higher profitability in their data center investments!

For a data center stock, it trades at an extremely low PE of 10 and Forward PE of 8.x. Compared to other listed peers like Digital Realty Trust which trades at a PE of 55, valuations are undemanding.

Its core business in logistics is also currently valued at a PE of only 4.8 compared to others like Freight Links (5.15) and CWT (12).

Main parent is Keppel Corp which owns 80% of KTT.

Just 5 years back, KTT was trading at a price of $5 and its earnings was 46% less than what is earning today.

(indirectly vested)

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For a data center stock, it trades at an extremely low PE of 10 and Forward PE of 8.x. Compared to other listed peers like Digital Realty Trust which trades at a PE of 55, valuations are undemanding.

Its core business in logistics is also currently valued at a PE of only 4.8 compared to others like Freight Links (5.15) and CWT (12).

Main parent is Keppel Corp which owns 80% of KTT.

Just 5 years back, KTT was trading at a price of $5 and its earnings was 46% less than what is earning today.

(indirectly vested)

Wow PER of 55x? That would be considered very demanding indeed! What kind of business model does Digital Realty Trust have which commands such a high PER?

Digital Realty Trust is in the business of providing data center solutions.
Some historical data about DLR.
[Image: DLR.png]

Wikipedia : http://en.wikipedia.org/wiki/Data_center
"A data center (or data centre or datacentre or datacenter) is a facility used to house computer systems and associated components, such as telecommunications and storage systems. It generally includes redundant or backup power supplies, redundant data communications connections, environmental controls (e.g., air conditioning, fire suppression) and security devices."

The demand for data centers is increasing due to more and more companies use of IT.

Data center companies listed in Nasdaq/NYSE command high PE, maybe due to its growth prospects ?.

propertyinvestor Wrote:For a data center stock, it trades at an extremely low PE of 10 and Forward PE of 8.x. Compared to other listed peers like Digital Realty Trust which trades at a PE of 55, valuations are undemanding.

A quick check to see if KTT is indeed a Data Center stock by looking at the latest Q311 financials, Segment Analysis (Pg 18 of 22), extracts,

[wrap]
[table=KTT]
Revenue
Income [/table]
[table=Logistics]
65,683
30,931[/table]
[table=Data Center]
20,361
10,690[/table]
[table=Investments]
3,737
32,398[/table]
[table=Consolidated Total]
86,693
74,019[/table] [/wrap]

Whether it's measured in terms of Revenue or Income, it still doesn't account for a large part of their biz. In fact, only 10-20+%. So, I doubt it's going to be going for the same kind of PE. But a subsequent SGX announcement (after Q311 results) of another Data Center investment does suggest they may be moving towards that direction.

Kep T&T owns 20% of M1 so it pays to look at M1 financials to see whether can they maintain the dividends going forward or else Kep T&T income will take a hit. If they do sell their stake at current prices, I believe it will unlock some decent value and potentially special dividends.

Declared 3.5 cents dividend, the same as last year. Good. Use the cash to expand business.
Business is expanding. Profit at record high. Share price near 52 low. Interesting.

Vested.

1) KTT gets 46% of income from investments in M1.
Considering that M1's business moat is being threatened, and might not be able to protect its profit margins, how do you think this will affect KTT's earnings?

2) While data centre is a very attractive source of growth, it currently only makes up about 17% of KTT's income. Could this suggest that a P/E of 8 plus is justified?

(19-01-2012, 09:26 AM)cyclone Wrote: Declared 3.5 cents dividend, the same as last year. Good. Use the cash to expand business.
Business is expanding. Profit at record high. Share price near 52 low. Interesting.

Vested.

If we remove the Exceptionals, Earnings are flat, in fact EPS is lower. The next few Quarters will be interesting as we start to see the impact of their Data Centre new biz plus smaller Logistics biz.