CIMB Research 2015-06-24: Keppel T&T Selldown Overdone - Keep ADD call but lower target price to S$1.86

• Widening discount Concerns of a fourth telco entrant in Singapore has led to the steep fall in M1’s share price in recent months. This in turn has affected KPTT’s share price, due its 19% stake in M1. 
• But we believe KPTT 's selldown has been overdone as it is trading at a 7% discount to the market value of its combined stakes in M1 and Keppel DC REIT – implying that the market is ascribing no value to its core logistics and data centre businesses. 
• At 10.6x FY16 P/E, we believe the current share price offers value and presents a good entry point. 
• We keep our Add call but lower our SOP-based target price to S$1.86 to reflect the lower market value of KPTT’s stakes in M1 and Keppel DC REIT. 
• Potential catalysts include capital recycling as KPTT divests its data centre assets to Keppel DC REIT. 

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