Keppel Limited

[weijian]

Keppel Corp has changed its name to Keppel Limited. Of course, things don't just change because of some logo or rebranding. But Keppel has been doing right and moving in the right direction (ie. from "Corp" to "Limited").

CEO bringing up "RNAV" is interesting. "RNAV" always pops up whenever minorities lament at how cheap companies are. I wonder if it is reflective more of whether the company really isn't that good, OR it is really cheap?

RNAV make sense when the company is for sale/take-over. But anything beyond that, talking about RNAV is probably reflective of the fact that a company isn't that good. That probably explains why the CEO of Keppel Limited doesn't want to be associated with "RNAV" as well!

MINUTES OF THE 56th ANNUAL GENERAL MEETING

CEO concluded that Keppel today is run more efficiently as one company (as opposed to what it used to be, a conglomerate of diverse operating companies). Keppel’s earnings are now more recurring and should attract growth multiples rather than being valued based on price to book and discount to RNAV with a further conglomerate discount. CEO noted that Keppel is well positioned to ride the next wave of quality sustainable growth.

https://links.sgx.com/FileOpen/GCAT_Minu...eID=802316

[ghchua]

Hi weijian,

CEO bringing up "RNAV" is interesting. "RNAV" always pops up whenever minorities lament at how cheap companies are. I wonder if it is reflective more of whether the company really isn't that good, OR it is really cheap?

Well, its unfair to label minorities are the only ones bringing up the RNAV issues. Analysts often too bought it up and companies themselves also presented those numbers in their annual reports. Tokyo Stock Exchange and SGX had also bought up this issue recently.

Whether the company is good or not is besides the point. The fact is that companies trading below RNAV are generally regarded as cheap. Efforts should be taken by companies to enhance corporate value and optimise capital efficiency to narrow the discount to RNAV.

RNAV make sense when the company is for sale/take-over. But anything beyond that, talking about RNAV is probably reflective of the fact that a company isn't that good. That probably explains why the CEO of Keppel Limited doesn't want to be associated with "RNAV" as well!

I disagree with your views here. Keppel Limited do not wish to be associated with RNAV measurement because they are going asset light. For companies which are still asset heavy or not intending to become asset light in the near future, RNAV is still a good gauge to measure the value of the company, with respect to its current trading price. This is especially true for those that are still making losses, as there is no earnings to measure ROE, PE etc.