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Sometimes in investing, even though you’ve done the most thorough research on a company, it still surprises you. And every once in a while, an apparently slow and steady blue-chip company makes such a dramatic turnaround that you no longer recognise it.

And Keppel has done exactly that. Over the last 5 years, its share price has surged about 230%! This year alone, it’s up nearly 40%. Most people would look at that and think, “It’s already run too far — no point chasing.”

But here’s the exciting part of my personal research that I want to share with you. Despite that massive rally, I see Keppel as one of the few Singapore blue chips that might still be worth a buy despite having outperformed massively. And in this post, I’ll explain why. We’ll go through the latest results, how the business has transformed, the growth engines powering it forward, and yes, the risks to watch out for.

Before we start, let me remind you that this post is for informational purposes only and not financial advice. Always do your own research and consult a licensed financial adviser before making any investment decisions. I own some of the shares discussed, but what works for me might not work for you.

Alright, let’s dive right in. 

Latest Financials: The Numbers Behind the Rally

If Keppel is one of the few surging Singapore blue chips I’m still buying, the numbers have to back me up. And the 1H 2025 results give us clear proof of how much the ‘new Keppel’ has changed.

Net profit came in at about $431 million, up 25% year-on-year if you exclude the legacy non-core portfolio. Recurring income, which is Keppel’s focus, rose to $444 million, 7% higher than a year ago.

Return on equity reached 15.4%, up from 13.2% in 1H 2024, and a huge step up from the mid-single digits it delivered in its older “conglomerate” days.

Funds under management climbed to $91 billion as at June 30, 2025, after its private funds raised $4.7 billion in the first half alone. Management continues to target funds under management of $200 billion by 2030, representing more than 100% growth from today.

Their asset monetisation is also progressing. In the year-to-date, Keppel has announced $915 million of divestments, with another $500 million worth of deals in negotiation. Since 2020, the group has divested around $8 billion in assets, and it has identified another $14.4 billion of non-core assets that Keppel intends to diversify.

Operationally, the power and renewables segment stood out. Contracted power generation capacity was about 71% locked-in as at June 2025, positioning it well to feed new demand from digital infrastructure like data centres.

The digital connectivity business also hit milestones. The Bifrost subsea cable, which hit the headlines recently, is a $350 million project jointly built with Meta and Telin, and is now “ready for service.” Keppel owns 5 of the 12 fibre pairs. Two pairs have already been sold under 25-year contracts, and negotiations for the remaining three are ongoing. 

Some analysts expect Bifrost to deliver an internal rate of return of above 30% and recurring Offshore & Marine fees of more than $200 million per fibre pair over its lifespan.

So, the latest numbers show us a company that is leaner, more recurring in earnings, and still raising capital at scale.

The 5-Year Transformation: From Conglomerate to Asset Manager

Here’s the real reason I’m still buying. It’s not just about past divestments — it’s about the growth engines Keppel has today, which I believe will carry it well into the next decade.

Back in 2018–2019, Keppel was a patchwork. Offshore & Marine was still a core piece, but bleeding as oil & gas markets slumped. It had M1 in telco, a logistics business, and even waste management exposure.

In October 2020, management laid out a bold plan: divest $10–12 billion of non-core assets over 5 years and pivot to become a global asset manager and operator of real assets. Many were skeptical, and from what I heard from the grapevines, even some insiders were not confident. 

But since then, the deals have been steady and deliberate.

In 2022, Keppel sold its logistics arm to Geodis. 

In 2023, the offshore & marine arm was merged with Sembcorp Marine to form Seatrium, removing Keppel’s most volatile division from its balance sheet. Personally, I recalled this was market-moving, and every investor was abuzz about this “life-changing” deal. 

In 2024, Keppel sold its 70% stake in Saigon Sports City for $354 million, and it also divested its remaining stakes in two Singapore data centres.

At the same time, it began restructuring M1. The headline deal in 2025 is the sale of M1’s mobile business to Simba (listed as Tuas on the ASX). A lawsuit from Liberty Wireless, the parent of Circles.Life, is ongoing — but Keppel has called the claims unmeritorious and said it won’t derail the deal.

In September 2025, Keppel announced the divestment of its 80% stake in 800 Super Holdings to Actis in a deal valuing the waste management company at over $600 million. Keppel and its Asia Infrastructure Fund had acquired the stake in 2022 for about $380 million. 

The exit came after three years of operational improvements and portfolio strengthening, and it marked the fund’s first divestment. Management highlighted that the deal crystallised value for investors, delivering EBITDA growth of about 20% during the holding period and generating an internal rate of return in the mid-teens.

In total, more than $8 billion of assets have been sold since 2020. Another $14.4 billion is earmarked for recycling.

This discipline changed how investors see Keppel. No longer a messy mix of cyclical businesses, it’s now a cleaner play on infrastructure, digital, and fund management.

Growth Engines: Asset Management, Infrastructure

So what actually drives Keppel today?

Start with infrastructure. The subsea cable business is brand new, but it’s already contributing. Bifrost, at 20,000 kilometres, is the first direct Singapore–US West Coast link, and is crucial for hyperscale cloud players due to the speed and latency. Keppel expects all 5 fibre pairs to be contracted within the next 2 years. Combine that with its data centre portfolio, and infrastructure makes up around a staggering 80% of net profit.

Then there’s real estate. Higher asset management fees with the increasing number of funds under Keppel, coupled with robust residential and commercial developments sales, led to a jump in net profit of $98m from a net loss of $20m in 1H 2024. This accounts for 23% of Keppel’s net profits. Keppel South Central is nearly 50% committed or in negotiations. And the residential sales at Sino-Singapore Tianjin Eco-City continue to contribute to earnings. 

Finally, connectivity. Although net profit fell to $57m from $70m in 1H 2024, due to lower valuation gains on sponsor stakes in private funds and forfeiture fee paid by M1, the segment still accounted for 13% of Keppel’s net profit. What’s promising is the higher asset management fees from the acquisition of two assets by Keppel DC REIT and first close of DC Fund III in December 2024.  

Together, these segments now make up the majority of earnings. That’s a radical shift from just 5 years ago, when offshore & marine dominated. 

And across the segments, we see asset management fees contributing significantly. In 1H 2025, fee income from asset management hit $195 million. With $91 billion FUM and $25 billion of dry powder, Keppel’s scale is now being compared to global managers like Brookfield and Blackstone — albeit at a smaller base. Closer to home, CapitaLand Investment’s FUM is larger, but Keppel is closing the gap. This is what I’m looking at closely, because recurring income is something that dividend investors like us adore, and Keppel seems to be moving in the right direction.

Valuation: How the Market Sees Keppel

The question you’re probably asking is: Uncle, why buy now after such a huge rally? So let’s talk valuation — because this is where I think Keppel still looks attractive compared to peers.

At around $9–10, Keppel trades at a forward PE of around 18 times. That’s not demanding. In fact, it’s well below global peers like Brookfield and Blackstone, often valued at high-teens multiples. But of course, Keppel is much smaller at this point in time. 

While I take analysts’ reports with a pinch of salt, it is still interesting to note that most analysts are optimistic on Keppel. JPMorgan initiated with an Overweight in October 2025 and a target of $12.50, implying more than 30% upside. UOB Kay Hian lifted their target from $10.46 to $10.85, bumping the asset management multiple from 15x to 18x, citing scale and execution.

So even after the rally, Keppel still trades at a discount to where it could be if investors fully buy into the “global asset manager” story. 

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Alright, let’s get back to Keppel.

Risks: What Could Go Wrong

But let’s be clear — I’m not positive about Keppel because it’s risk-free. It still faces challenges, and here’s what you need to watch.

Legal risks are one. The Liberty Wireless lawsuit against M1 may not derail the Simba deal, but it shows that legacy assets can create noise. With another $14.4 billion of disposals ahead, we can expect risks 

Execution risk is another. Growing funds under management from $91 billion to $200 billion by 2030 is ambitious. Blackstone and Brookfield took decades to build reputations. Keppel is still relatively new in global fundraising circles.

And finally, operating exposure. Yes, asset management is scalable, but Keppel also runs sophisticated facilities such as data centres and power plants. A downturn in power demand or oversupply in data centres could pressure margins really quickly due to the high expenses involved.

So while the macro story is positive, investors need to keep an eye on execution and operations.

The Dividend Uncle’s Take

So here’s my bottom line.

Keppel today looks nothing like the Keppel of 5 years ago. It’s not just a shipyard and property conglomerate anymore. It’s becoming an asset-light global manager of infrastructure, digital, and renewable assets — and the results are showing up clearly in higher profits, stronger R.O.E., and growing dividends.

Yes, the share price has already surged 230% over the last 5 years and 40% this year. But valuation is still considered reasonable at 18 times forward PE.

That’s why, despite the big rally, Keppel is still one of the few only Singapore blue chip I’m personally still buying today. I see it as a long-term compounder that combines growth, dividends, and capital discipline.

But as usual, this is my personal research for my own portfolio, and may not be suitable for you – so do your own research and let me know what do you think?

Do you think Keppel has more room to run, or would you rather take profits after such a huge rally? Let me know in the comments — I’d love to hear your view.

Until next time, stay patient, stay disciplined, and happy investing!