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Keppel Corporation Limited’s Business: 4 Things Investors May Not Know, But Ought To

Keppel Corporation Limited (SGX: BN4) is one of Singapore’s largest companies and can be considered a bona fide conglomerate given its diverse businesses.

To support the latter point, Keppel Corp has a few business segments, namely, Offshore & Marine, Property, Infrastructure, and Investments. Although, the lion’s share of the company’s revenues and profits come from the first two segments.

Investors have been shunning oil & gas companies over the past two years given the sharp decline in oil prices. This includes Keppel Corp, which has large exposure to the oil & gas industry from its Offshore & Marine segment. The segment happens to be one of the world’s largest oil rig builders.

Given Keppel Corp’s size and the amount of attention the financial media pays to the oil & gas industry, it is likely that investors know a lot about the company.

But there may still be important aspects of Keppel Corp’s businesses that are not widely known by investors. Here are four:

1. It’s a global company

Keppel Corp may be based and listed in Singapore, but it is actually more of a global company than a Singapore company. Why so? Because Keppel Corp derived more than 70% of its revenue from overseas in 2015. See the table below:

keppel-corp-geography-revenue-table
Source: Keppel Corp 2015 annual report

2. It has a significant asset management business

In 2016, Keppel Corp consolidated its various fund management businesses into a single entity called Keppel Capital.

As of 30 September 2016, Keppel Capital has S$26 billion in assets under management (AUM). To put things into perspective, ARA Asset Management Limited (SGX: D1R), an asset management company listed in Singapore, has an AUM of S$30.0 billion as of the same date. (ARA currently has a market capitalisation of S$1.7 billion and is in the process of being taken private.)

3. It has interests in many listed companies and REITs

Keppel Corp is a large shareholder in many other companies and trusts in Singapore’s stock market.

This includes Keppel Infrastructure Trust (SGX: A7RU), Keppel REIT (SGX: K71U), KEPPEL DC REIT (SGX: AJBU), Keppel Telecommunications & Transportation Ltd (SGX: K11), K1 Ventures (SGX: BLT), M1 Ltd (SGX: B2F), and KrisEnergy Ltd (SGX: SK3).

And when it comes to the trusts – Keppel Infrastructure Trust, Keppel REIT, and Keppel DC REIT – Keppel Corp is also their manager.

4. Like its revenue, a significant proportion of Keppel Corp’s shareholders are from overseas

The chart below shows where Keppel Corp’s shareholders are based in:

keppel-corp-shareholding-by-geography
Source: Keppel Corp 2015 annual report

As you can see, up to 64.3% of Keppel Corp’s shareholder base is from outside Singapore. This supports my previous point that Keppel Corp is more of a global company than a Singaporean company.

So there you go, four things that investors may not have known about Keppel Corp. Knowing them can be useful for investors to better the company’s complex business empire.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.