We are adding 6,000 shares of Kian Joo into our Dividend Yield portfolio. The group latest 2QFY13 report  card was come in within the street as well as our expectation, making up 52%-57% of the full-year  forecast. Meanwhile, Kian Joo also declared a total net dividend per share of 6.25 sen (including its 2.5 sen interim dividend and 3.75 sen special dividend; ex-date was set on 6th September), translating into a dividend yield of 4.4%. On top of that, the group also proposed a 1-for-2 bonus issue as well as 1-for-4 renounceable rights issue of warrant after bonus issue at an issue price of RM0.01 per warrant, which the entitlement details will be announced in the later stage. 

 

Outlook-wise, the company has the resources to enhance its production operational efficiency and continue delivering growth. Moreover, we believe the easing raw material prices will also benefit its bottom-line-line going forward. We believe the group’s share price could provide some trading opportunities should the entitlement date being fixed in the later stage. We have a target price of RM3.16 for Kian Joo based on a targeted FY14 PER of 10x.

 

Source: Kenanga