Posted by buybackma > 2013-01-09 17:25 | Report Abuse

Last week, Deleum announced that it has accepted an offer to purchase a 50% stake in NSE Resources Corp, a company involved in the supply of specialty chemicals and renewable energy for a tentative consideration of RM21.3m. Financial details have yet to be disclosed but we expect synergistic benefits from the said acquisition. We maintain our BUY recommendation pending more details and highlight that Deleum pays strong dividends, with an expected 6.9% net yield in FY12, and 7.3% net yield in FY13. We maintain our BUY recommendation and look forward to further details on this deal. We value Deleum at RM2.39/share based on FY13 P/E of 8.2x which is inline with the group’s peak cycle average P/E.  We highlight that Deleum is expected to pay out 13.2sen in dividends by end FY12, translating to a net yield of 6.9%. This is based on a 48% net payout ratio which the group has consistently been paying in previous years. Going into FY13, we expect the dividend yield to increase to 7.3%. By Alliance Research - 07/01/13