Kenanga Research has recommended that investors hold on to shares of Bintulu Port Holdings, due to its high valuation, with the counter offering an attractive yield of 5.5 per cent.

'The fair value is based on a discounted cashflow valuation with a weighted average cost of capital of 9.4 per cent,' Kenanga said in its research note today.

It said Bintulu Port, Malaysia's second largest port in terms of cargo volume, had reported a strong rebound of 72 per cent in its second quarter 2010 net profit.

This brought its first half 2010 net profit to RM74.1 million, which was within Kenanga's expectations.

As expected, the company had announced a second interim single tier dividend of 7.5 sen per share.

Kenanga said Bintulu Port would still be the main port of call for liquefied natural gas (LNG) vessels and it did not expect any material impact to its earnings, should the government decide to reduce the tariff for LNG vessel handling as this would be cushioned by the lower lease rental.-- Bernama