PUNCAK (6807) : AmResearch maintains Hold on Puncak Niaga
KUALA LUMPUR: AmResearch has maintained its Hold on Puncak Niaga with a fair value of RM3.40 a share, it said in a note on Wednesday.
Puncak Niaga has yesterday entered into a sale and purchase agreement to dispose of its 100% and 70% stakes in Puncak Niaga Sdn Bhd (PNSB) and Syabas, respectively, to Pengurusan Aset Air Selangor Sdn Bhd (PASSB) for RM1.55bil.
It said Puncak intends to distribute RM534.3mil from the proceeds as cash dividends to shareholders within three months. Based on the current shares outstanding, the payout translates to RM1.29/share, or a yield of 37%.
Puncak intends to utilise RM1.02bil from the proceeds for future investments which may include expansion into the oil & gas businesses and other ventures.
The inking of the agreement is much-welcomed following protracted talks between the various stakeholders to restructure the water supply business in the state for years.
"We advise shareholders to accumulate to enjoy the dividend windfall of RM1.29/share (or RM1/share based on the fully-diluted shares of 534.6mil). The EGM is expected to be called soon with the proposed disposal to be completed in 1Q15," it said.
However post-disposal, Puncak may be classified as a cash company and trigger Practice Note 17 given that water treatment and supply is a core business for the group.
"Hence, we maintain our Hold call on Puncak until we see further clarity on the group’s future business plans," it said.
http://www.thestar.com.my
KUALA LUMPUR: AmResearch has maintained its Hold on Puncak Niaga with a fair value of RM3.40 a share, it said in a note on Wednesday.
Puncak Niaga has yesterday entered into a sale and purchase agreement to dispose of its 100% and 70% stakes in Puncak Niaga Sdn Bhd (PNSB) and Syabas, respectively, to Pengurusan Aset Air Selangor Sdn Bhd (PASSB) for RM1.55bil.
It said Puncak intends to distribute RM534.3mil from the proceeds as cash dividends to shareholders within three months. Based on the current shares outstanding, the payout translates to RM1.29/share, or a yield of 37%.
Puncak intends to utilise RM1.02bil from the proceeds for future investments which may include expansion into the oil & gas businesses and other ventures.
The inking of the agreement is much-welcomed following protracted talks between the various stakeholders to restructure the water supply business in the state for years.
"We advise shareholders to accumulate to enjoy the dividend windfall of RM1.29/share (or RM1/share based on the fully-diluted shares of 534.6mil). The EGM is expected to be called soon with the proposed disposal to be completed in 1Q15," it said.
However post-disposal, Puncak may be classified as a cash company and trigger Practice Note 17 given that water treatment and supply is a core business for the group.
"Hence, we maintain our Hold call on Puncak until we see further clarity on the group’s future business plans," it said.
http://www.thestar.com.my
