KUALA LUMPUR, May 27 — Analysts have made positive calls on Petronas Gas Bhd (PetGas) after the company recorded steady performance for the first quarter of its financial year ended Dec 31, 2021 (Q1FY21).
CGS-CIMB Research has reiterated its “Add“ call on PetGas with an unchanged target price (TP) of RM17.70, given its stable earnings profile, healthy balance sheet, and decent dividend yield.
Its analyst, Ngo Siew Teng, said the company’s Q1FY21 core net profit of RM554.3 million was in line with the research house’s full-year estimate at 29 per cent, and at 28 per cent of Bloomberg consensus, as operating costs could normalise and pick up in the remaining quarters.
Ngo said the company’s declaration of first interim dividend of 16 sen for Q1FY21 was within expectation, and CGS-CIMB expected PetGas to sustain its ordinary FY21-F (forecast) dividend per share (DPS) at similar levels to FY20 (ordinary DPS of 72 sen), representing a dividend yield of over four per cent.
“Given the ongoing optimisation of its balance sheet, we believe more special dividends could be in the pipeline,” she said in a note today.
On prospect, Ngo said the research house, however, anticipated the company’s FY21-22-F core net profit to normalise and be weaker than FY20’s, given the lower plant turnaround and operating costs in FY20 due to the Covid-19 outbreak.
Meanwhile, Kenanga Research has upgraded PetGas to “Outperform” call from “Market Perform” previously, with a slightly higher sum-of-parts-based-driven TP of RM17.06 from RM16.97.
Analyst Teh Kian Yeong said the company’s Q1FY21 core profit of RM554.3 million came slightly above the research house’ expectations on the back of continued cost rationalisation and interest cost savings from the capital restructuring exercise.
“Operationally, topline was fairly on track, thanks to the regulated business framework which proved its earnings resiliency even during this pandemic period,” he said in a separate note.
“As the recent price weakness is presenting buying opportunity coupled with its sustainable over five per cent dividend yield, we have upgraded our call on the company,” said Teh.
PetGas said in an exchange filing on Tuesday that its Q1FY21 net profit rose to RM516.4 million from RM368.1 million in the same period previously, as it maintained world-class reliability performance across all plants and facilities.
However, revenue decreased four per cent to RM1.34 billion from RM1.39 billion previously.
At 10.41 am, PetGas shares climbed 16 sen, or one per cent to RM16.14 from RM15.98 at Tuesday’s close, with 320,400 shares traded. — Bernama
