MIDF Amanah Investment Bank Bhd (MIDF Research) has maintained its BUY call on Deleum Bhd's stock following the successful acquisition of a 70% stake in PT OSA Industries Indonesia (OSAII) for US$7 million (RM31.01 million) through its wholly owned subsidiary, Deleum Services Sdn Bhd.

The research house noted that the move aligned with Deleum's plans to expand its regional presence and enhance its technical expertise.

MIDF Research has set a target price of RM1.97 For Deleum, citing the acquisition as a key driver for growth in the energy infrastructure sector.

OSAII, a specialist in valve supply and maintenance, has been the exclusive channel partner for Baker Hughes valves since 2017 and MIDF Research believes the acquisition will strengthen Deleum's capabilities in valve management solutions, enabling the company to cater more effectively to oil and gas players locally and regionally.

The research house believes the transaction positions Deleum to address the increasing demand for valve solutions, especially in Indonesia, where the control and pressure relief valve market significantly outpaces that of Malaysia, with an estimated market size of US$52 million.

MIDF Research said the acquisition also allows Deleum to extend its market reach into Thailand and Vietnam, while benefitting from the cross-border exchange of expertise and talent development. The research house noted that this collaborative effort would improve workforce capabilities, ultimately enhancing operational efficiency and service quality. Reliable valve solutions are critical to the smooth operation of upstream facilities, and the acquisition is expected to bolster Deleum's contributions to the energy sector's long-term demands.

MIDF Research remains positive about Deleum's outlook, highlighting the resilience of the upstream division and the synergies expected from this acquisition. The research house has not revised its financial projections for the company but emphasised the transaction's alignment with Deleum's broader strategy of regional growth and market diversification. The acquisition underscores Deleum's commitment to delivering high-quality solutions and reinforcing its position as a leading energy services provider in the region.