OSK Oil & Gas Sector Stock Picks, Aug 2011



O&G

OSK remain OVERWEIGHT on the O&G industry and Buy calls on both Coastal and Dayang.

OSK like Coastal for its mergers and acquisition story. OSK re-iterate their view that it would be a matter of time before Coastal finds itself a suitable partner for M&A purposes.

OSK also like Dayang due to it’s stable, recurring income. This is because oilfield and platform maintenance are all-year-round jobs and having a slice of this business pie is always better than getting one-off jobs as they provide assurance of future earnings sustainability

Below are the target prices and ratings for selected Oil & Gas stock.

Stocks Price (RM) Target price (RM) Market Cap (RM million) Rating
Alam 0.79 1.45 621.9 Buy
Bumi Armada 3.95 1.45 11,567.4 Neutral
Coastal 2.06 5.15 995.5 Buy
Dayang 1.75 5.15 962.5 Buy
Dialog 2.52 3.12 5,030.0 Buy
Kencana 2.70 3.17 5,366.1 Buy
KNM 1.53 3.91 1,531.7 Tr Buy
MMHE 6.50 8.23 10,400.0 Neutral
PCHEM 6.33 9.28 50,640.0 Buy
P Energy 1.30 2.34 253.5 Buy
P Perdana .64 1.50 288.1 Buy
Tgoff 0.94 1.29 274.4 Neutral
WSC 2.19 3.50 1,614.0 Buy

Source : OSK Research


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