Company Name: DELEUM BHD
|Research House: ALLIANCE||Price Call: HOLD||Target Price: 1.65|
ALLIANCE DBS Research has maintained a "hold" call on Deleum Bhd with a lower target price of RM1.65 from RM1.90 previously, following the broad oil and gas sector's de-rating.
In a note, the research house said this was because Deleum has a 50 per cent dividend payout policy, which at the current share price implied an attractive 5.3 per cent yield.
"Deleum has resilient earnings with RM3.8 billion orderbook. We expect crude price to hold at between US$70 and US$80 (RM243 and RM278) per barrel next year versus our previous assumption of US$95, but there will be minimal impact on Deleum's earnings," the research house said.
The key contracts in Deleum's RM3.8 billion orderbook were the 10-year service agreement for turbomachinery services involving small gas turbines and a five-year well maintenance contract to provide slickline services, it said. Bernama