To The Moon

📈 $Keppel(BN4.SI)$ shares had been on a relentless, 7-day winning streak from 21 to 29 September, driven by news that it was in advanced talks with StarHub on a potential deal for M1

✍While the stock has given back almost all gains since, on the back of a global sell-off, Macquarie Research (MQ) maintains its target price of $12.87 on the share, especially after Keppel held its annual technology forum NEXT earlier this week on Tuesday 29 September

👀Read more to find out the rationale for MQ’s view, as well as important disclaimers:

What’s new

Keppel (KEP) held its annual technology forum, NEXT, on 29 September. The event was open to public equity buy-side investors for the first time.

Why it matters

This year's event was decidedly a broader discussion on applications of AI in the business, in contrast to the more technical discussion on infrastructure (data centres) in 2025. The session started by laying out the infrastructure needs of an AI economy, how to build an AI ecosystem, and practices of AI native companies. It then moved on to discuss KEP's aspirations and applications of AI, rounding off with guiding principles for the company's fund management business going into 2040.

Key takeaways from the discussions: 1) AI and robotics will help unlock new business insights and drive operational efficiencies (i.e., cost savings);

2) Keppel MESH to act as a centralised data depository across all business units (downside: critical infrastructure risk);

3) KEP has the operational expertise and resources (land, power, water) to enable the AI data centre buildout; and,

4) real estate will require more operational expertise to drive returns, with yield compression a less reliable returns driver in future.

The event was light on numbers, with mostly qualitative takeaways. In response to a sell-side question on funds under management (FUM) targets for 2040, KEP avoided giving firm targets and instead pointed to Brookfields' rapid scaling of assets under management (AUM) once it achieved scale.That saw Brookfields' AUM rise from around US$200 billion to around US$1 trillion over a decade (2015-25). MQ views that as an attempt to draw parallels with KEP's FUM target of S$200 billion for 2030, the same FUM number as Brookfields' was back in 2015.

Overall, the mood from the audience was positive despite the less tangible takeaways this year. Conclusion: KEP remains focused on growing its asset management business, leveraging its operational expertise to drive above average returns for its investors.

What now

Maintain Outperform. MQ expects the asset management narrative and asset monetisation (especially the potential divestment of M1) to remain the key drivers of share price. MQ has a 12-month target price of $12.87 based on a Sum of Parts stock methodology.Note:Macquarie Research is independent from the Warrants business, what the Macquarie Warrants desks quote from Macquarie Research may not reflect the complete analysis of Macquarie Research on the relevant company over time.

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Macquarie has a trending Keppel call warrant $KeppelMBeCW270226(UWQW.SI)$ which costs $0.033 this morning as of 930AM while Keppel shares trade at $11.06. The warrant will move in the same direction as Keppel shares but in a greater magnitude, known as the gearing effect.  As an example of how gearing works, UWQW gained 20% to SGD 0.042, more than Keppel’s 7-day rally of 4% from 21 to 29 September 2026.

​​​​​​​​​​​​​​Note that gearing works both ways, and the warrant could also fall in a greater percentage compared to Keppel shares. For example, UWQW is down 8.5% lower to SGD 0.032 this morning given Keppel’s 1% fall to $11.07.

There is no put warrant available over Keppel.Warrants can be traded on an investor’s brokerage account just like shares, and does not come with margin calls. There is no put warrant available over Keppel.