Keppel T&T

Keppel T&T: FY13 net income of $55.5m was below Street estimates by 2.5%, while revenue of $137.5m (16.4% y/y) was in-line with estimtes. While its data centres and warehouses boosted revenue, the Company's "Other Income" declined by 93% due to a lack of disposal gains, dragging operating profit down by 41.9% y/y. Higher expenses were also incurred, mainly from the increase in headcounts for the Logistics and Data Centre divisions, and the rental, maintenance and upkeep of data centres and warehouses. The Company proposed final dividend of $0.035 (unchanged y/y), to be payable 7 May 2012; Indicative yield of 2.6%. Mgmt plans to focus on maintaining high occupancy rates for its logistics facilities in SEA and China, and execute major expansion projects in China. Street's TP of $1.47 is based on a 11.3x forward P/E, providing a potential return of 8% from the last closing price.