I have divested my holdings in Keppel Telecommunications and Transportation (K11) at
$1.85 per share to record a healthy 21.0% total profits.
(prices include transactional costs) |
Divestment Thesis:
This is a case whereby business fundamentals had deteriorated and I believe that $1.85 is a fair price for Keppel T&T for the current situation that it finds itself in now.
Interested readers might recall that I had provided a target price of $1.98 when I wrote my investment thesis on Keppel T&T (
here). Here is what I think has fundamentally changed for Keppel T&T:
M1 is going down
I described M1 as a "stable, recurring income player" and I stand corrected.
Revenue fell, Net Income fell, Return on Equity (ROE) fell and even dividends fell.
To make matters worse, this terrible performance was before the 4th Telco even began operations in Singapore. The ......