DELEUM (RM1.70) - Company’s RM4bn orderbook is expected
to last up to 2023 backed by major contract wins such as the 5-year Pan Malaysia
slickline equipment and services contracts and 7+3 year Long-Term Service
Agreements for the provision of Turbomachinery maintenance services of gas
turbines.Tenderbook remains healthy with current bidding for RM1.1b-1.2b
contracts, of which 70-80% are for new contracts in its oilfield services
division. Growth is expected from company’s regional expansion plans, and
intentions to grow its Asset Integrated Solutions. Earnings are projected to
grow at CAGR of 18% over next 2 years with PE only at 10xFY15. Company is also
in a net cash position minimising risk of interest rate hikes and forecasted to
pay an attractive dividend yield of 5% in 2015. Accumulate with TP:
RM2.05. (TYK)
CHINWELL (RM1.41) - Chin Well is one of the world’s
largest manufacturers and suppliers of carbon steel fasteners (i.e. screws, nuts
and bolts). Chin Well manufactures and supplies fasteners that are primarily
utilized in highway guard rails, power transmission towers, furniture and other
applications. The bulk of the group's products are exported (Malaysia 24%,
Vietnam and others 11%, Europe 57%). Recent acquisition of the remaining 40% in
its Vietnam production for RM47.6mil via issuance of 27mil new shares at RM1.45
plus RM8.31m is earnings accretive. Eps per share for JuneFYE14 would have risen
to 14.83sen (9.5xPE) from 13.15sen. 1QFY15 reported net profit of RM13.5m which
equates to annualised EPS of 18sen (7.8xPER). Chinwell has a minimum dividend
policy of 40% equating to 5.1% dividend yield. Prospect for company is positive
as it benefits from translation gains from weaker RM, while 6% GST tax is lower
than existing sale tax of 10%. New orders from Germany and France for
Do-It-Yourself (DIY) products are expected to expand its margins further.
Currently trades at strong support level of RM1.40 after falling 20% from its
peak of RM1.74 following announcement of Vietnam acquisition. Accumulate ahead
of completion of acquisition with TP: RM1.80. (TYK)
