Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (Dec 29): Puncak Niaga Holdings Bhd (PNHB) rose 4.1% or 10 sen to RM2.78 on expectation of a special dividend payment to shareholders in the near-term.

PNHB’s share price rose to a high of RM2.81 but gave up gains to settle at RM2.78 as at 12.12pm, with 774,700 units traded.

In a note today, Kenanga Research maintained its “overweight” recommendation on the water sector, premised mainly on expectation of a special dividend payment from PNHB, that will be distributed to investors in the near-term after six years of deadlock.

Kenanga said out of RM1.56 billion cash proceeds expected to be received by PNHB, RM534.3million would be distributed to shareholders and the remaining RM1.02 billion would be kept for future investments.

“The special dividend is equivalent to RM1.00/PNHB’s shares (fully diluted), way higher than our initial expectation of only 19 sen per share (fully diluted),” Kenanga said.

The research house added that dividend payment of RM1.00/shares implies a huge 40% yield based on PNHB’s current price.

Nonetheless, Kenanga might consider reviewing its call and valuations with a downward bias as it could not ascertain the group’s future direction after the sale of its water assets post-special dividend payout, estimated 3-6 months from now.

In terms of share price performance, despite all the positives, PNHB’s share price is still trading below its disposal price tag of RM2.89/share, it said.

“We believe this is mainly due to the recent removal of the stock’s shariah compliant status.

“Hence, we view this as an opportunity for investors to accumulate the stock as PNHB’s fundamentals remain intact and most importantly, investors could enjoy huge yield of 40% as a result of the special dividend of RM1.00/fd share to the shareholders pursuant to the group’s water assets sale,” it added.

      Print
      Text Size
      Share