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KUALA LUMPUR, Sept 7 -- AmInvestment Bank Bhd (AmInvest) has maintained its “overweight” rating with eight “buy” calls versus one “sell” on the oil and gas sector.
The investment bank said excluding Serba Dinamik’s second quarter (Q2 2021) results which have yet to be announced, the first half of 2021 (H1 FY21) earnings delivery of the eight companies under its coverage were mixed with three above expectation, two underperformed and three within expectation.
In a sector report today, AmInvest said the companies registering above-market H1 2021 results were Bumi Armada, Hibiscus Petroleum (Hibiscus), and Petronas Chemicals while Dialog Group and Sapura Energy suffered from higher-than-expected operating costs amid the continuing Covid-19-imposed movement restrictions.
“Bumi Armada’s commendable performance stemmed from lower lumpy operating costs while higher oil-driven product prices lifted the margins of Petronas Chemicals Group and Hibiscus (which also benefited from additional cargo shipments),” it said.
AmInvest said it continues to like Dialog Group for its resilient non-cyclical tank terminal and maintenance-based operations and Yinson Holdings’ strong earnings growth momentum from the full-year contributions of floating, production, storage, and offloading (FPSO) vessels Helang, off Sarawak, Abigail-Joseph in Nigeria and Anna Nery in Brazil, plus multiple charter opportunities in Brazil and Africa.
“Yinson has also recently signed a memorandum of understanding to supply a mid-sized floating production, storage, and offloading vessel to Enauta’s Atlanta field in Brazil.
“We also like Sapura Energy as its completed RM10 billion debt restructuring package positions the formidable engineering, procurement, construction, installation and commissioning (EPCIC) group to secure fresh global orders,” it added.
AmInvest said Petronas Gas offers highly compelling dividend yields from its optimal capital structure strategy and resilient earnings base.
The investment bank has maintained 2021-2022 oil price projection at US$65 to US$70 per barrel as Brent crude oil prices have recovered above US$70 per barrel currently after falling to US$65 per barrel on Aug 20 this year, on concerns that the COVID-19 Delta variant could dampen global demand. (US$1=RM4.14)
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