Keppel Infrastructure Trust, a Singapore-based infrastructure fund, is set to provide a stable 10% dividend yield from 2025 to 2027, supported by long-term contracts covering 60% of its portfolio. With an asset under management (AUM) of S$9 billion, KIT’s diversified income streams span speciality chemicals, energy, public transportation, and renewable energy. Investment house CGS International anticipates balance sheet improvements through strategic divestments, paving the way for future acquisitions.
KIT’s portfolio is significantly backed by long-term contracts exceeding 15 years, ensuring resilient cash flows. The trust’s focus on evergreen business models, such as renewables and digital infrastructure, aims to protect its valuation and drive growth. Recent divestments, including a 24.62% stake in Ventura to Samsung Asset Management for S$109 million, are expected to reduce KIT’s gearing and enhance its financial flexibility.
The trust’s strategy includes expanding its global presence across developed Asia, Australia, New Zealand, and Europe, leveraging trends in renewables and digitalisation. KIT’s assets operate in regulated environments, offering inflation resistance and high entry barriers. The trust’s funds from operations (FFO) have grown at a compound annual growth rate (CAGR) of 6.3% from 2019 to 2024, supporting a stable distribution profile.
KIT’s target price is set at S$0.45, with potential catalysts including improved business performance and strategic acquisitions. The trust’s diversified income streams and attractive returns position it favourably amidst a positive interest rate outlook.
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