Stock Picks – Oil & Gas Sector – January 2011



O&G

The share prices of O&G stocks are undergoing a re-rating, largely fuelled by positive market sentiment and strong news flow. Going forward, partnerships or actual contract awards will be the main ‘push’ factor for further share price upside and the lucky companies will continue to outperform those which lack news flow. Average sector PER valuation is raised from 13.2x to 16.6x. Maintain Overweight on the sector, with top picks being Kencana Petroleum, Alam Maritim, Petra Perdana and Petra Energy.

Below are target price for selected companies in Oil & Gas Sector.

Stocks Price (RM) Target price (RM) Market Cap (RM million) Rating
Alam 1.11 1.50 820.8 Buy
Coastal 2.40 4.41 866.4 Buy
Dialog 2.14 2.51 4,243.3 Buy
Kencana 2.64 3.37 4,373.4 Buy
KNM 3.08 3.95 3,224.8 Buy
MMHE 6.39 6.68 10,224.0 Buy
PCHEM 6.35 6.20 50,800.0 Neutral
P Energy 1.95 2.16 380.3 Buy
P Perdana 1.10 1.57 327.4 Buy
Tgoff 1.64 2.18 405.1 Buy
WSC 2.25 2.29 1,518.8 Neutral

Source : OSK Research


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