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AmBank keeps 'overweight' call for O&G sector

TheEdge Tue, Jan 14, 2020 11:42am - 8 months ago


KUALA LUMPUR (Jan 14): AmImvestment Bank Research has maintained its "overweight" rating on the oil and gas (O&G) sector, and said there was no impact from the Sabah-Sarawak Gas Pipeline (SSGP) fire.

In a sector update today, the research house said its call is further supported by optimistic prospects with rising asset utilisation globally, which has contributed to service providers' recovery in results.

AmInvstment analyst Alex Goh maintained his top stock picks for companies with stable and recurring earnings such as Serba Dinamik Holdings Bhd and Dialog Group Bhd, with dividend yields of 4.9% and 1.2% respectively for the current financial year 2020 (FY20).

"We like the recurring income business model of Dialog and Serba Dinamik, which are involved in operation and maintenance services, while Dialog's earnings visibility is further secured by the Pengerang Deepwater Terminal project with its enlarged buffer zone.

Goh maintained his 'Buy' calls for MISC Bhd, Sapura Energy Bhd and Velesto Energy Bhd.

The dividend yields for MISC and Sapura Energy are 3.6% and 1.6% respectively for FY20. The dividend yield for Velesto Energy Bhd was not stated.

Goh maintained his 'hold' recommendation for Petronas Chemicals Group Bhd (PetChem) with an unchanged fair value of RM7.80 per share.

He maintained PetChem's FY19-FY21 earnings, and explained that the SSGP fire will not have any significant repercussions on Petronas Gas Bhd's earnings.






Related Stocks

DIALOG 3.810
MISC 7.500
PCHEM 5.610
PETGAS 16.420
SAPRES 0.395
SERBADK 1.640
VELESTO 0.130

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