KEYFIELD: Asset Disposal Bolsters Financials, Rating Adjusted to Hold
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM1.70 (+4.9%) |
| Last Traded | RM1.62 |
| Recommendation | HOLD |
A recent investment bank research report indicates the successful completion of a significant asset disposal, which has notably strengthened the financial position of the company. The transaction involved the sale of a DP2 accommodation workboat, Keyfield Compassion, for a total cash consideration of USD36.8 million, with full proceeds received and vessel delivery completed on February 20, 2026.
The disposal is expected to generate a net gain of approximately RM75–77 million. This strategic move is anticipated to transition the group into a net cash position, significantly enhancing its liquidity buffer and capital allocation flexibility. The non-recurring gain from this disposal is expected to be recognised in the first quarter of FY26 and will be excluded from core earnings assumptions.
Future Outlook and Capital Deployment
Proceeds from the disposal are slated for redeployment towards future fleet expansion, signaling a strategic focus on enhancing operational capacity. Additionally, a portion of the gains may be channeled to shareholders, with the investment bank foreseeing scope for a higher-than-expected dividend payout in FY26F, potentially exceeding a 5% yield, compared to the previous assumption of 4.5%. This is subject to board approval.
Analyst Recommendation
Despite the positive financial impact, TA SECURITIES has maintained its target price at RM1.70 per share. This valuation is based on 9.0x FY26F EPS and incorporates a 3% ESG premium. However, given the limited upside to the current valuation, the investment bank has downgraded its recommendation from BUY to HOLD.
