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Keppel Infrastructure Trust – Resilient assets support attractive yield
By Beansprout  •  June 13, 2024

Summary

Initiate coverage with BUY. We initiate coverage on Keppel Infrastructure Trust (KIT) with a BUY rating. KIT invests in infrastructure assets in developed markets that provide stable cash flows. About 65% of its revenue is linked to the CPI with cost pass-through. Assets under management reached S$8.7 billion as at end-March 2024.

Distributions expected to grow. Excluding the one-off special dividend paid in FY23, we expect distribution per unit to rise in the next two years. Underpinning this will be: 1) a resumption of distribution from Keppel Merlimau Cogen Plant; 2) contributions from newly-acquired German solar plant; and 3) contributions from Ventura Bus operations in Victoria, Australia from 2H24.

Optimise debt/equity mix to boost returns. As a business trust, KIT is not subject to the regulatory gearing cap. Total debt to total assets was 48.6% as at end-March 2024. This was well below bank covenants. The average cost of debt was

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By Beansprout
Hi, I’m Gerald! I have been working in investment analysis for more than 12 years. Often, I encounter everyday investors who find it difficult to invest. At Beansprout, we believe that with the right tools and knowledge, everyone can be an investor. Hence, we founded Beansprout to make quality investment insights more accessible. We hope that you can join us on this journey to grow your financial knowledge and confidence as an investor.
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