Malakoff Corp Bhd (-ve)
TRADING of shares in Malakoff Corp Bhd (fundamental: 1.15/3, valuation: 2/3) triggered our momentum algorithm after its shares were sold down to close at 95.5 sen yesterday, a decline of 8.17% from its previous close. A total 27.9 million shares were traded, more than five times its 200-day average volume of 4.88 million.
This was following an announcement that DRB-Hicom Bhd is disposing of a 97.37% stake in waste disposal management company Alam Flora Sdn Bhd to Malakoff for RM944.6 million cash. DRB-Hicom would see a RM735.4 million gain from the proposed disposal.
As for Malakoff, it noted that it will be able to partake in the increasingly important and growing non-concession environmental services sector such as in the provision of integrated solid waste, recycling and integrated facility management services.
The group also said the acquisition will enable it to expand its business and activities into environmental-related services.
At the current level, Malakoff is trading at a trailing price-earnings ratio of 18.3 times with a dividend yield of 6.4%.