• Proposed acquisition of SPH to be earnings accretive, will grow recurring-income base, in line with Vision 2030.
• SPH owns synergistic businesses with Keppel. Acquisition to provide opportunity for Keppel to expand and enter into secular growth areas.
• Net gearing to increase to just under 1x after acquisition, which is at the upper end of its historical gearing range. No change to our forecasts pending SPH EGM and regulatory approval.
• Maintain BUY and SOTP TP of S$6.28, still with a 10% holding-company discount. Our TP translate to about 1.0x FY21e book value, a slight discount to its 5-year average of 1.05x. Catalysts expected from O&M contract wins and a successful resolution to its O&M unit

Source: Phillip Capital Research - 3 Aug 2021