(Stocks Discussion) SGX: Keppel Corporation Limited (SGX: BN4)?

Greetings, everybody! In this post doodle jump, I will provide my opinions after reviewing the stock's financials, business concepts, and value.

Shares of Keppel Corp fell yesterday (11 August 2020) following the unexpected announcement by Temasek Holdings that it will pull out its $4 billion partial offer as a result of the conglomerate’s poor financial showing.

The fall in share price came amid investors' concerns over the future of Keppel. Keppel's stock plummetted by over 12% in early trading yesterday before picking up to close down 11% at $4.80.

Back in October 2019, Temasek owned about 20% of Keppel and offered to buy an additional 30% stake if the company met key conditions and there were no material unfavourable change in the group’s financial performance. It was stated in the agreement that the conglomerate’s profit after tax shouldn’t fall beyond 20%, or $557 million, over the cumulative four quarters from the third quarter ended September 2019.

Earlier in Aug, Temasek announced that it will come to a decision on whether it will continue with the partial buyout after Keppel breached a precondition following Q2 losses at nearly $698 million.

The decision to withdraw the bid surprised markets, investors and analysts as Temasek was expected to lead consolidation in Singapore’s offshore and marine industry.

Temasek Holdings' proposed $4.08 billion deal to take majority control of Keppel Corporation could pave the way for consolidation in Singapore's offshore and marine industry.

Despite Temasek decision to drop the bid for Keppel, I think Keppel’s future remains promising given that the industry remains strategic to Singapore and it has been able to diversify itself to be more than just offshore and marine. That being said, the conglomerate will need to first fix issues with its current structure in order to solve complex underlying issues in the offshore and marine industry.

Shares of Keppel Corporation are currently trading at $4.82 as of 12 August 2020 at 11.09am.​​​