Deleum Berhad

@terence775 Therefore the potential beneficiaries of current period are $DELEUM / 5132 (DELEUM BERHAD), $T7GLOBAL / 7228 (T7 GLOBAL BERHAD), $PENERGY / 5133 (PETRA ENERGY BERHAD), Sapura Energy, Carimin, MHB … ?

27 November 2024

$DELEUM / 5132 (DELEUM BERHAD) ANALYSIS Q3 FY 2024 – “Strong Performance and Attractive Valuation for Investors."

Current Stock Price and Valuation: Compelling and Attractive addition to a diversified portfolio especially in a market with limited investment-grade stocks."

Deleum - Based on an estimated FY 2024 EPS of 17 Sen, Deleum’s valuation is expected to range between RM1.70 and RM2.04 using P/E ratio of 10 to 12.

The Q3 FY 2024 EPS was 6.24 Sen and 9 mths Q3 FY 2024 YTD EPS was 14.12 Sen (FY 2023 9mths YTD = 7.74 Sen and FY 2023 was 11.39 Sen)

Deleum is currently trading at RM1.43, which appears to be a bargain considering its potential. The share price has ranged from 86 Sen to RM1.69 over the past year.

Based on FY 2023 earnings per share (EPS) of 11.39 Sen, it is trading at historical P/E ratio is 12.6. Using the 4 rolling quarters to 30 sept 2024 EPS of 17.77 Sen, it is trading at PE 8.05. P/E ratio based on the trailing twelve months (TTM) is more relevant for current valuation given its increasing profit trend.

Deleum is on track to achieve a record corporate profit this financial year 2024.

•Q3 profit before tax (PBT) increased 91.7% to RM48.6 million in the third quarter ended 30 September 2024 from RM25.3 million previously.
•Q3 FY 2024 Net profit attributable to shareholders more than doubles to RM25.1 million (Q3 FY 2023 = RM12.2 million) and 9 mths YTD 3Q 24 was RM56.7 mil (Q3 FY 2023 9 mth YTD = RM31.1 million) with EPS of 6.24 Sen and 14.12 Sen respectively for Q3 and 9 mths YTD and achieving new record high quarterly net profit since listing.
• Strong OIS segment growth supports record results; new contract wins strengthen future performance
The performance was due to the improved profit margin for the Power and Machinery (P&M) segment and the continued positive momentum of the Oilfield Integrated Services (OIS) segment.

PROSPECTS Brent crude prices remain within the expected price range, swayed by concerns over global oil demand growth, as well as declining oil inventories and the decision by OPEC+ members to delay production increases until December 2024. Despite the confluence of events, capital expenditures for the oil and gas (O&G) sector in Malaysia remain robust, benefiting local service providers including Deleum. Deleum was recently awarded two significant contracts by Petronas Carigali Sdn Bhd for the provision of Pan Malaysia offshore maintenance, construction, modification (MCM) and hook-up and commissioning (HUC) services. These contracts represent a major addition to the Group’s MCM portfolio, signalling a positive shift as the Group moves towards bolstering its order book for the Oilfield Integrated Services (OIS) segment, setting a foundation for renewed growth. Deleum has seen a strengthening of the OIS segment this year and is optimistic that the segment will continue to drive the Group’s performance for the current financial year together with the Power and Machinery segment. The progress aligns with our objective to achieve a more balanced earnings contribution across both segments. Looking ahead, while we remain cautious of market uncertainties associated with the O&G industry, we anticipate the overall financial year to be positive

Investment merits:

• Increasing profits trend with a dividend policy of 50% payout.

• Consistent dividend since FY 2022 (FY 2022 =5.25 Sen, FY 2023 =5.7 Sen and FY 2024 interim Dividend 4 Sen)

• Return on equity of above 10% and with FY 2024 9 mth of 12.9%

• Cash balance of RM206.6 mil (51.4 Sen per share) and the cash balance at 31 Dec 2023 was RM215.9 mil. The total bank borrowings @30 Sept was RM15.4 mil

• Consistent operating cash generated from operation amounting to RM46.0 million to 30 Sept 2024 and FY 2023 was RM78.8 million

• Positive outlook of the industry with growth and Company heading toward record corporate profit

Financial Information
Market Capital (RM): 574.222 mil @ RM1.43
Number of Share: 401.554 m
EPS FY 2023 (cent): 11.39
EPS FY 2024 (cent): 17.77 (4 Rolling quarters)
P/E Ratio: 8.047
NA per share: RM 1.01 Sen
ROE: 16.15%
CAGR Revenue: 4.9%
CAGR PAT: 11.0 %

OVERVIEW OF OPERATIONS

Deleum’s core business operations are centered on the upstream activities of the oil and gas sector, with a particular focus on exploration and production activities. Drawing from over four decades of extensive experience, the Group has solidified its position as a reliable partner, capable of delivering comprehensive solutions that contribute to the success and efficiency of exploration and production activities. Our core business segments continue to be Power and Machinery (“P&M”), Oilfield Services (“OS”), and Integrated Corrosion Solution (“ICS”). The detailed performance write-up by segments is in the ‘Segmental Performance’ section of the Annual Report FY 2023.

@LittleShare @weiwenn928 @boncos @zhexiangxd it's sad to see weakness in oil n gas names. Sector was supposed to be a bright spark this year onwards but due to squabble between Sarawak and Petronas, it got dragged down.

Additionally - now that Trump had won, there's pressure on oil price.

Regardless, opex spending will continue and capex too (despite what could be a lower amount), both leading to continuous earnings potential from the companies within the sector. Hopefully fundamentals will eventually prevail.

$CARIMIN / 5257 (CARIMIN PETROLEUM BERHAD) $DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) $PERDANA / 7108 (PERDANA PETROLEUM BERHAD) $UZMA / 7250 (UZMA BERHAD) $DELEUM / 5132 (DELEUM BERHAD)

KUALA LUMPUR: Deleum Bhd's wholly-owned subsidiary Deleum Services Sdn Bhd has purchased an additional 16% stake in gas turbine supplier Turboservices Sdn Bhd from Solar Turbines International Company for RM7.34mil.

Titan Weekend Chart Reviews

$DELEUM / 5132 (DELEUM BERHAD)

Had a huge breakout from its RM 1.30+ main downtrend resistance since retracing over the past few months.

For now looking ripe for an uptrend continuation pattern. As long as able to sustain above its RM 1.30 support, could continue on towards and beyond the RM 1.40 - RM 1.50+ regions soon.

Support: RM 1.30 area
Resistance: RM 1.35, RM 1.40, RM 1.52 areas

22 August 2024

Deleum Berhad, a robust financial company in the oil & gas sector, is currently trading at a PE ratio of 8.58, based on a rolling four-quarter EPS of 14.56 Sen, offering a dividend yield of 4.56%.

Looks compelling to buy at RM1.25 Sen. Deleum range from 70 Sen to 82.5 using PE 8.5 to 10 based on FY 2019 EPS of 8.26 Sen.

Financial Performance and Valuation
For the six months ending 30 June 2024 (1H24), Deleum reported a substantial increase in profitability:
• Group PBT rose by 63.0% to RM54.8 million.
• Net profit climbed 67.7% to RM31.6 million.
• Revenue increased by 24.3% to RM387.3 million.
EPS for Q2 2024 was 5.57 Sen, bringing the cumulative EPS for 1H FY 2024 to 7.88 Sen. With positive management guidance, Deleum anticipates achieving an EPS of over 16 Sen for FY 2024.
Valuation and Stock Performance
Based on forward PE ratios of 9 to 10, Deleum's stock could justify a valuation range of RM1.44 to RM1.60.

Over the past 12 months, the stock has traded between 83 Sen and RM1.52.

Deleum is trading at PE8.58 with dividend yield of 4.56%. Current proposed 1st Interim dividend for FY 2024 is 4 Sen ex-date on 12 Sept and payable on 30 Sept. The dividend policy is 50% payout (since FY2010, it has consistently been paying dividend annually) and it is a net cash Co with net cash of RM 219 mil at 30 June 2024 (cash balance of RM237 mil and borrowings of RM17.67 mil). The current assets of RM 537 mil exceed its current liabilities of RM 220 mil by RM317 mil. The Balance sheet is sound with and for FY 2023 Co generated RM79 mil (FY 2012 RM23 mil) operating cash flow and 1H FY 2024 the operating cashflow was RM46 mil. The net asset per share is RM1.075 per share compared to share price of RM1.25.

Deleum 2Q24 pre-tax profit soars 104.6% to RM37.5 million • Robust growth in the Power and Machinery segment, coupled with significant rebound in Oilfield Integrated Services segment, drives strong 2Q24 results Kuala Lumpur, Malaysia, 21 August 2024 – Leading oil & gas (O&G) services provider Deleum Berhad’s (Deleum, the Group, 迪隆, Bloomberg: DLUM MK) pre-tax profit (PBT) soared 104.6% to RM37.5 million in the second quarter ended 30 June 2024 (2Q24) from RM18.3 million in the previous corresponding quarter, mainly driven by robust growth in the Power and Machinery (P&M) segment and a significant rebound in Oilfield Integrated Services (OIS) segment.

Growth in both segments contributed to a 20.1% increase in 2Q24 group revenue to RM225.9 million from RM188.1 million previously. Consequently, net profit surged 130.0% to RM22.4 million in 2Q24 from RM9.7 million last year.

P&M continued to be the largest contributor to the Group’s 2Q24 revenue, making up 78.2%, with the balance coming from the OIS segment.

The Group’s OIS businesses demonstrated significant progress in 2Q24 across multiple areas. Following the successful completion of a sludge treatment pilot project, the segment secured a longer-term contract and potentially will have future similar engagements with other oil terminals which may have the same needs and requirements. Additionally, the solid control operations remain on track with a mix of development and drilling operations throughout the year, coupled with the promising expanding business in Indonesia. These achievements are expected to contribute to sustained momentum in the upcoming quarters.


Prospects by Management
The oil and gas (O&G) industry has shown resilience in overall activities in the first half of 2024, with the oil prices staying within the expected price range. Deleum remains focused on delivering sustainable growth through strategic initiatives and operational excellence while exploring new market.

The Group is investing in digital solutions and innovative technologies to optimise our operations and enhance our service offerings. Leveraging our robust financial position, we actively pursue strategic acquisitions to strengthen our market position and expand our capabilities.

We continue to see strong performance in our Power and Machinery segment, along with a significant rebound in Oilfield Integrated Services segment. These improvements are expected to contribute significantly to our overall performance in the 2024 financial year.

Deleum is encouraged by the continued recovery in global oil demand which supports a resilient outlook for the O&G industry. While there are inherent uncertainties in the global economic landscape, we remain confident in our ability to deliver sustainable growth.
Disclaimer

This publication is not a buy or sell call of the company and the contents of this publication should not be considered as professional financial investment advice or buy/sell recommendations. This publication (analysis) has been written for information purposes and general guidance on matters of interest for discussion only and does not constitute professional advice or legal opinion. The information contained in this publication (analysis) should not form the basis of any decision as to a particular course of action. You should not act upon the information contained in this publication without obtaining specific professional advice. Therefore, every investment decision and its associated risks are the responsibility of the investor.

Above analysis is prepared by the author free of charge solely for educational purpose and discussion in the group consented by the author and shall not constitute an investment advice or recommendation to sell and/or buy the share(s) mentioned in this analysis. The views are based on the author’s assumptions and estimations as of this date and subject to change, for educational and informational purposes. Please consult your licensed adviser in any of your investment decision.
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You should do your own research and rely on your own evaluation to assess the merits and risks of your investment. You are therefore strongly suggested to engage the services from a competent professional financial advisor or take independent financial advice before you proceed to invest. You should consult your stockbroker, bank manager, solicitor, accountant or other professional advisers for your investment decision.

$DELEUM / 5132 (DELEUM BERHAD)

$DELEUM / 5132 (DELEUM BERHAD)
Research by MIDF
BUY – TP RM1.64

"Strong Upstream Demand Supported 1HFY24 Earnings”

• 1HFY24 normalised earnings up +77%yoy, revenue up +24%yoy on improved P&M, OIS segments; offset by higher opex
• Earnings came above expectations
• Sanguine outlook on upstream, prompts higher demand for OGSE operations; offset by geopolitical and economic uncertainties
• Maintain BUY with a revised target price of RM1.64

Analyst:
MIDF Research
research@midf.com.my

$DELEUM / 5132 (DELEUM BERHAD)

$ARMADA / 5210 (BUMI ARMADA BERHAD) $DELEUM / 5132 (DELEUM BERHAD) $YINSON / 7293 (YINSON HOLDINGS BERHAD) $HIBISCS / 5199 (HIBISCUS PETROLEUM BERHAD)

The Edge's Centurion Club Awards 2024 sees $HARBOUR / 2062 (HARBOUR-LINK GROUP BERHAD) as the Centurion of the Year for 2024. This comes after Harbour was also shortlisted as one of Forbes' Best under a Billion club not long ago, which hopefully should put them on the radar of more people to look into and study their business.

Other companies that scored a triple winner on their respective categories (Highest RoE, highest growth in PAT, and highest returns to shareholders) in their sector include $DELEUM / 5132 (DELEUM BERHAD) $KOTRA / 0002 (KOTRA INDUSTRIES BERHAD) and $REDTONE / 0032 (REDTONE INTERNATIONAL BERHAD) .

The award is evaluated based on the the scoring criteria of return to shareholders (30% weightage); PAT growth (40%); and ROE (30%) over three years.

While harbour is probably not likely to win this award again soon, as they are coming off of unprecedented freight rates in 2023 (and thus the benchmark they will have to compare with is unrealistically high in a normal business environment), I think they will still score rather well in general.

Anyhow, congratulations to all the winning companies! Are any of them part of your investment portfolios? The award winners could be a good place to start as a shortlist for further study.

11 July 2024

Our Stocks Watchlist

Dufu @ RM2.63 – Buy and hold for long term and Company is benefiting from both Seagate and Western Digital expected strong Q4 (June 2024) with revenue growth and volume of HDD shipped from market sources. Both Dufu’s customers are looking at further double digit % growth for Q4 June 2024

Notion @ RM1.98 – buy on weakness below RM1.80. Company reported good Q1 (EPS 1.56 Sen & PAT RM8.024 mil) and Q2 (EPS 2.72 Sen & PAT RM14.035 mil) with 1H net profit of RM22.059 mil with EPS of 4.27 Sen. The Co HDD business will be benefit from Western Digital Growth as WD is the Company’s HDD customer. Company had stated in no uncertain term that 2H will be better and we projected FY 2024 EPS to be 10 Sen

IFCAMSC @88.5 Sen – speculative and for trading purpose for short term investment. Just ride on the market momentum and business news on Einvoicing and after Q2 Report would have better feel of Company’s outlook.

ADB @RM1.28 – buy below RM1.20 and ride on the market momentum and business news on Einvoicing, after Q2 30 June Report would have better feel of outlook.

PIE @RM 6.37 – Too late to board the bus and valuation is ahead of earnings.

RGB @48 Sen) – Buy and hold when below 49 Sen. RGB is taking a breather and consolidating around 50 Sen. Valuation of 60 Sen to 72 Sen based on projected FY 2024 profit. On 31 May the Co secured a RM381 mil contract for delivery of gaming machines in FY 2024 and expected 70% delivery in Q3 and 30% in Q4. Thus, 2H will have a very strong result. Potential catalyst for further growth and to have dominance gaming machines market in Philippines with the regularization of the gaming industry and Philippines Players upgrading their facilities with the booming gaming industry. Looking at recent price volume, we think there is still leg to move up


QES now @71.5 Sen is valuable stocks to enter. Share price year range 46 Sen to 78 Sen. We heard trading of PPE for steal industries orders had been overwhelming and staff are paid above 3 mths bonus. Strong orders were shipped out in Q2 30 June and a rerating is due.

Recently secured orders from a German MNC with worldwide presence for test equipments. This could give Co to make inroad worldwide if the customer found it to be good and reliable.

Inari @RM 3.96 is probably fair valued achieving our target valuation. Better outlook and profit when their China Plant commenced operation with huge potential as Chinese semiconductors and RFID sensor Companies or Players will need Inari JVC to support their development.


ONG Companies
Deleum@ RM1.30 – good to hold and assess the co progress.

As at the end of the first quarter of 2024, Deleum maintained a strong cash position, boasting cash and bank balances ofRM279.8 million, an increase of RM63.9 million from RM215.9 million as at 31 December 2023. Shareholders’ equity remained steady at RM409.5 million as of 31 March 2024. Currently, Deleum’s order book is robust at RM594.7 million, with the majority of works and equipment slated for delivery within the next 12 months. Below is Q1 March Press Release



Coastal – just hold and no point cutting now just hold and wait for confirmation of extension of contract and new positive developments.

Ulicorp @RM2.21 – already FAIR VALUED AND achieved target valuation compared to our recommendation @RM1.40 in March.

SKB Shutters – only for investors with longer term perspective will be extensively involved with data centre buildings and waiting for Mr Market rerating

Samchem – Chemical and distribution business is seeing improvement in performance.

Bahvest @56 Sen. – Monitor closely when the BV Warrant expire on 20 Aug 2024 the share may vroom vroom. New shareholders and management would have cleaned out the mismanagement and gold pilferage.

$DUFU / 7233 (DUFU TECHNOLOGY CORP. BERHAD) $NOTION / 0083 (NOTION VTEC BERHAD) $SKBSHUT / 7115 (SKB SHUTTERS CORPORATION BERHAD) $RGB / 0037 (RGB INTERNATIONAL BHD) $DELEUM / 5132 (DELEUM BERHAD)

OIL & GAS
$MISC / 3816 (MISC BERHAD) $DELEUM / 5132 (DELEUM BERHAD)
Research by MIDF
Positive

“Oil and Gas”

Crude oil up +11%yoy. Average Brent crude oil for Jun CY24 gained +10.7%yoy to a monthly average of USD83.01pb. This was a +1.1% increase from CY23 average of USD82.12pb. The gain was due to: (i) China’s steady economic growth momentum in 1HCY24, (ii) extended OPEC+ production cuts until 3QCY24, and (iii) the continuous geopolitical tensions in Eastern Europe and Middle East. This was moderated by increased US crude oil inventory in 1HCY24.

Analyst(s):
MIDF Research
research@midf.com.my

PETALING JAYA: The latest contract bagged by Deleum Bhd from PETRONAS Carigali Sdn Bhd for offshore services will contribute positively to the former’s financial year 2024 (FY24) performance in the duration of the contract, says MIDF Research.

$DELEUM / 5132 (DELEUM BERHAD)
Research by MIDF
Buy – TP of MYR 1.62

“RM105m Contract to Add to FY24 Revenue”

LoA from PETRONAS Carigali. Deleum Berhad (Deleum)’s 86.67% owned indirect subsidiary, Deleum Technology Solutions Sdn. Bhd. (DTS), has received a Letter of Award from PETRONAS Carigali Sdn. Bhd (PCSB). The contract consisted of the Provision of Offshore Maintenance, Construction and Modification (MCM) Services covering Peninsular Malaysia Assets (Gas Package) for CY24.

Analyst(s):
MIDF Research
research@midf.com.my

$DELEUM / 5132 (DELEUM BERHAD)

KUALA LUMPUR: Deleum Bhd’s 86.67%-owned indirect subsidiary Deleum Technology Sdn Bhd has secured a contract from PETRONAS Carigali Sdn Bhd for the provision of offshore maintenance, construction and modification services covering Peninsular Malaysia assets (gas package) for 2024.

KUALA LUMPUR: Deleum Bhd's 86.67%-owned indirect subsidiary Deleum Technology Sdn Bhd (DTS) has secured a contract from PETRONAS Carigali Sdn Bhd for the provision of offshore maintenance, construction and modification (MCM) services covering Peninsular Malaysia assets (gas package) for 2024.

KUALA LUMPUR: Deleum Technology Solutions Sdn Bhd, a 86.67 per cent owned indirect subsidiary of Deleum Bhd, has bagged a job worth RM105 million from Petronas Carigali Sdn Bhd for the provision of offshore maintenance, construction and modification (MCM) services covering Peninsular Malaysia Assets (Gas Package) for the year 2024.

© New Straits Times Press (M) Bhd

KUALA LUMPUR: Deleum Bhd's 86.67%-owned indirect subsidiary Deleum Technoogy Sdn Bhd (DTS) has secured a contract from PETRONAS Carigali Sdn Bhd for the provision of offshore maintenance, construction and modification (MCM) services covering Peninsular Malaysia assets (gas package) for 2024.

OTHERSDELEUM BERHAD ("DELEUM" OR THE "COMPANY")

RECEIPT OF LETTER OF AWARD FROM PETRONAS CARIGALI SDN. BHD. (PCSB) FOR THE PROVISION OF OFFSHORE, MAINTENANCE, CONSTRUCTION AND MODIFICATION (MCM) SERVICES COVERING PENINSULAR MALAYSIA ASSETS (GAS PACKAGE) FOR THE YEAR 2024

TRANSACTIONS (CHAPTER 10 OF LISTING REQUIREMENTS) : RELATED PARTY TRANSACTIONSDELEUM BERHAD ("DELEUM" OR "THE COMPANY")

PROPOSED SUBSCRIPTION OF 869,565 NEW ORDINARY SHARES REPRESENTING 7.7% OF THE ENLARGED EQUITY INTEREST IN LATCONNECT 60 LIMITED (THE "PROPOSED SUBSCRIPTION")

$DELEUM / 5132 (DELEUM BERHAD)
Research by MIDF
Buy – TP RM1.58

“Robust OGSE Demand Added to Deleum’s Earnings"

• 1QFY24 normalised earnings up +20%yoy, came within expectations
• Revenue climbed +31%yoy from P&M, OS segments, partially offset by lower activities in ICS
• Robust outlook on upstream, premise on higher demand for OGSE
• Maintain BUY with a revised target price of RM1.58

Analyst:
MIDF Research
research@midf.com.my

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

OTHERSDeleum Berhad - Press Release: Deleum 1Q24 pre-tax profit jumps 13.1% to RM17.3 million

Leading oil and gas (O&G) services provider Deleum Bhd is striving to achieve sustainable growth through strategic collaborations, technological innovations and operational excellence.

KUALA LUMPUR: Leading oil and gas (O&G) services provider Deleum Bhd is striving to achieve sustainable growth through strategic collaborations, technological innovations and operational excellence.

General Meetings: Outcome of Meeting

OTHERSDeleum Strides to Accelerate Growth

MATERIAL LITIGATIONDeleum Berhad ("Deleum" or "the Company")
- Forensic Investigation at Deleum Technology Solutions Sdn. Bhd. (formerly known as Deleum Primera Sdn. Bhd.)("DTS"), a 86.67% owned indirect subsidiary of Deleum - Kuala Lumpur High Court Suit No. WA-22NCC-544-11/2020

RHB's Top 20 Malaysia Small Cap Jewels 2024 Edition!

$ABLEGLOB / 7167 (ABLE GLOBAL BERHAD) $AWC / 7579 (AWC BERHAD) $CLOUDPT / 0277 (CLOUDPOINT TECHNOLOGY BERHAD) $DELEUM / 5132 (DELEUM BERHAD) $ENGTEX / 5056 (ENGTEX GROUP BERHAD) and more!