KUALA LUMPUR (Feb 18): CGS-CIMB Research has upgraded Malakoff Corp Bhd to “Add” at 86 sen with a higher target price (TP) of 96 sen (from 95 sen) and said the group’s FY20-21F earnings profile could improve due to acquisition of Alam Flora.

In a note Feb 17, the research house said management guided that the group will likely maintain 100% dividend payout in the near term until the DPS reaches an absolute amount of 7 sen.

“Assuming 100% dividend payout, this translates into a decent dividend yield of circa 6% for FY19-21F.

“We cut our FY19-20F EPS forecasts by 7-10% to factor in the lower earnings from associates/joint ventures due to widening losses at Kapar Energy Ventures.

“We upgrade Malakoff from Hold to Add with a revised SOP-based TP of 96 sen given the better earnings outlook and attractive dividend yield,” it said.