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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
Related posts:
- Stock Picks – Construction Sector – January 2011
- OSK Oil & Gas Sector Stock Picks, Aug 2011
- OSK Oil & Gas Sector Stock Picks, June 2011
- ECMLibra Oil & Gas Sector Stock Picks, Jul 2011
- OSK Oil & Gas Sector Stock Picks, Feb 2012
- Stock Picks – Media Sector – January 2011
- ECMLibra Oil & Gas Sector Stock Picks, April 2011
- Stock Picks – Automotive Sector – January 2011
- Stock Picks – Construction Sector – October 2010
- OSK Steel Sector Stock Picks, Jul 2011
