MY : Petronas Dagangan Bhd - High dividend payout underpins Add rating

1Q21 core net profit of RM189m made up 30% of our/consensus full-year profit, in-line as the inventory gains in 1Q21 may not repeat in future quarters. Maintain Add as PDB has upped its 1Q21 DPS to 14 sen (1Q20: 5 sen), although we cut our DDM-based TP to RM20.17 on higher Ke of 6.6%. While PDB is likely to report a weaker 2Q21F on lower inventory gains and tighter MCO 3.0 restrictions, its dividend-paying capacity remains attractive.

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