20 yrs ago Kep Corp in 2001 and Keppel Vision 2030.

 20 years ago in Sep 2001; Uncle8888 believe and bought into Keppel's restructuring story in Round 1 @ $1.32 after Sep 11 WTC when market crash and Keppel made money as No 1 Oily company!

20 years later; Keppel became smelly, oily stock and most hated and has to shake off the smelly and oily business with its Keppel Vision 2030. Again; Uncle8888 still believe and now at Round 101 i.e. 100 rounds more than in 2001! LOL!

Average 5 rounds P.A over 20 yrs!

Read? Yield of dreams: Investors have "a once in a lifetime opportunity" in blue chips (15)

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Sunday, 25 September 2016

Read? You Are Stupid To Lose Money In Your O & G Investment! Blame Yourself For Stupidity!

In Aug 24, 2001

Promising Conglomerates Still Struggle in Singapore

By Richard BorsukStaff Reporter of The Wall Street Journal

Aug. 24, 2001 12:01 am ET

SINGAPORE -- Two state-run Singapore conglomerates have each developed a more attractive story to tell potential investors than what was offered several years ago, but they still aren't receiving reams of rave reviews.

Keppel Corp. and SembCorp Industries are getting more attention than they did during the late 1990s. As well they should, since the two sometime-competitors look significantly different and better than they did during the 1997-98 Asian financial crisis. Many investors avoided the two complex holding companies, often seen as proxies for "Singapore Inc." The unhappiness stemmed from low rates of return, a result of inefficiency and high-cost diversification and expansion from their colonial-era roots in shipyards and engineering.

A series of restructuring and pruning moves has led some analysts and fund managers to regard the diversified companies in a more favorable light. They were pleased last year when SembCorp, whose five core businesses are utilities, engineering and construction, environmental engineering, logistics and marine engineering, sold off its Delifrance chain of French-style patisseries. Meanwhile, Keppel reduced its number of units and untangled a web of crossholdings involving several listed subsidiaries.

While the respective revamps have won the companies some fans, their share prices have at times languished. Interest in the companies was neither sustained nor broadly based. Many Singapore analysts have "buy" or "outperform" ratings on one or both at present, often based on the belief that there's hefty value left to be unlocked. They contend shares of Keppel Corp., which began its restructuring later, can reach about 4.25 Singapore dollars (US$2.43) in the next year. On Thursday, Keppel closed unchanged at S$3.32.

But some fund managers say that, while they welcome change at the two conglomerates, they don't like the odds for a significant rise in their share prices in coming months because they don't foresee short-term gains for equities battered by global markets and the grim outlook for trade-dependent Singapore. After growing 10% last year, Singapore may see its economy shrink in 2001.

Even when economic conditions improve -- boosting some of the infrastructure, property and other businesses that either company is in -- not everyone will stock up on the conglomerates; chilly market sentiment still lingers. Hugh Young, managing director of Aberdeen Asset Management Asia, says they and most Singapore companies are making gains in seeking ways to boost shareholder value. "But we still prefer companies with focus and specialization" rather than diversified interests, he says.

In recent months, Keppel Corp. has moved to both tap locked-up value and to respond to complaints that the holding company doesn't have clear core businesses. It sold its 37% stake in banking arm Keppel Capital Holdings to Oversea-Chinese Banking Corp. , generating an exceptional profit of S$800 million. Keppel Corp. also announced its intention to privatize its listed oilrig unit, Keppel FELS Energy & Infrastructure, making that one of its core operations. In addition, a capital-reduction program will pay shareholders 50 Singaporean cents a share.

Keppel Corp.'s moves and first-half results -- profit rose 21% -- have gotten mixed reviews from analysts. "Restructuring has only just begun" was the title of a bullish note from SG Securities. Its Singapore research chief, Foo Jou Min, calculates S$4.30 as Keppel Corp.'s "breakup value," which means that at current levels the stock can still be considered undervalued.

On the other side, the first-half results led G.K. Goh Securities to downgrade Keppel Corp. to "hold" from "buy." Having sold its banking interests, the holding company now "lacks strong earnings drivers" in the short term, the brokerage firm said.

Analysts agree that SembCorp has found a new driver for earnings, as its utilities division provides power to an increasing number of chemical and other customers on Singapore's Jurong Island. Utilities "is going to be the star as we move on," Chief Executive Wong Kok Siew said last week.

But growth in the energy business will come at a cost, most analysts say. They expect SembCorp will need to raise more cash in 2002, which will increase its debt load. A report by Merrill Lynch, which is "neutral" on SembCorp, says fundraising looks inevitable. One fund manager calls that expectation "a sword hanging over SembCorp." But Salomon Smith Barney rates the stock "outperform" and has set a price target of S$2.20 in the next year. On Thursday, SembCorp rose two Singaporean cents to S$1.61.

Overall, analysts say changes made so far at both Keppel and SembCorp should be applauded. However, in part, because equities in general seem out of favor, "the market isn't rewarding the conglomerates for their restructuring," says Sim Chey Hoon, an analyst at Merrill Lynch.

Another Singapore-based analyst says he believes that even if the conglomerates had done a highly impressive restructuring job, they still would be shunned. Experiences in many countries have left investors "with a feeling that few conglomerates in Asia produce high rates of return," he says.