OSK is bullish on the O&G industry in the immediate term as it would be very soon before new contracts are awarded, including:
- RM8-10bn worth of hook-up commissioning in the Pan Malaysia cluster
- marginal oilfields
- replacement of expiring brownfield contracts.
OSK’s top picks for the sector is SapuraKencana Petroleum (BUY FV RM3.00), Dialog (BUY FV: RM3.45) and Dayang (BUYFV: RM2.90). They like these companies for their excellent track records and believe that in the event of a slowdown in contract awards, they would still have strong orderbook.
Below are the target prices and ratings for selected Oil & Gas stock.
| Stocks | Price (RM)* | Target price (RM) | Market Cap (RM million) | Rating |
|---|---|---|---|---|
| Alam Maritim | 0.685 | 1.25 | 539.2 | Buy |
| Bumi Armada | 3.81 | 4.35 | 11,160.1 | Buy |
| Coastal | 2.00 | 2.44 | 966.5 | Buy |
| Dayang | 2.47 | 2.90 | 1,358.5 | Buy |
| Dialog | 2.41 | 3.45 | 5,837.9 | Buy |
| KNM | 0.465 | 0.49 | 692.9 | Neutral |
| MMHE | 4.46 | 4.76 | 7,136.0 | Neutral |
| Petra Energy | 1.63 | 1.94 | 349.6 | Buy |
| Perdana Petroleum | 1.00 | 1.17 | 495.1 | Buy |
| SapuraKencana Petroleum |
2.97 | 3.00 | 14,863.0 | Buy |
| Wah Seong | 1.73 | 2.13 | 1,340.6 | Buy |
* as of 14th December 2012
Source : OSK Research