PANTECH (5125) : AllianceDBS maintains ‘buy’ on Pantech
KUALA LUMPUR: AllianceDBS Research has maintained its 'buy' call on Pantech Group Holdings Bhd shares at a lower target price of RM1.10.
In a note today, the research house said despite slowing offshore demand forecast in financial year (FY) 2015-2016, it continued to expect the group to record healthy earnings growth in FY2016-2017.
"The demand from the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor, should more than offset sluggish offshore demand.
"Pantech is already seeing demand trickling through from the Rapid project. They recently secured orders to supply induction long bends to the main pipeline currently being laid," it said.
The research house expected demand to surge from second half of 2016 when construction activities started in Pengerang.
It said the stock remained a 'buy' on the back of healthy earnings driven by Rapid and attractive seven per cent dividend yield for the 2016 financial year forecast, it said.
"It does not have a formal dividend policy but has consistently paid out more than 40 per cent of profits since listing in 2007," it said.
Pantech is a long-term supplier of pipes, valves and fittings to Malaysian fabricators like Malaysia Marine and Heavy Engineering Holdings Bhd and SapuraKencana Petroleum Bhd.
Pantech shares fell half-a-seb ti 77.5 sen at 3pm.-- Bernama
KUALA LUMPUR: AllianceDBS Research has maintained its 'buy' call on Pantech Group Holdings Bhd shares at a lower target price of RM1.10.
In a note today, the research house said despite slowing offshore demand forecast in financial year (FY) 2015-2016, it continued to expect the group to record healthy earnings growth in FY2016-2017.
"The demand from the Refinery and Petrochemical Integrated Development (Rapid) project in Pengerang, Johor, should more than offset sluggish offshore demand.
"Pantech is already seeing demand trickling through from the Rapid project. They recently secured orders to supply induction long bends to the main pipeline currently being laid," it said.
The research house expected demand to surge from second half of 2016 when construction activities started in Pengerang.
It said the stock remained a 'buy' on the back of healthy earnings driven by Rapid and attractive seven per cent dividend yield for the 2016 financial year forecast, it said.
"It does not have a formal dividend policy but has consistently paid out more than 40 per cent of profits since listing in 2007," it said.
Pantech is a long-term supplier of pipes, valves and fittings to Malaysian fabricators like Malaysia Marine and Heavy Engineering Holdings Bhd and SapuraKencana Petroleum Bhd.
Pantech shares fell half-a-seb ti 77.5 sen at 3pm.-- Bernama
