KUALA LUMPUR, May 20 ― Petronas Gas Bhd (PetGas) was among the top losers in early trade, falling 1.61 per cent, following its lower net profit announcement in the first quarter ended March 31, 2022 (Q1 2022) of RM410.58 million from RM516.40 million in Q1 2021.

PetGas said the weaker net profit was attributed to a higher effective tax rate due to the imposition of the prosperity tax and lower pre-tax profit.

However, the group recorded higher revenue for the quarter at RM1.46 billion from RM1.34 billion year-on-year, mainly contributed by higher revenue from the utilities segment due to higher product prices and higher electricity volumes. At 10.20am, the company fell 28 sen to RM17.08, with 144,500 shares changing hands.

Nevertheless, research houses have maintained their positive stance on PetGas.

In a note today, AmInvestment Bank said it kept its “buy” call on PetGas with an unchanged sum-of-parts-based (SOP) fair value of RM20.20, which reflects a premium of three per cent for environmental, social and governance (ESG) rating of four stars.

“Pending an analyst briefing later today, we maintain our forecast for now although the group’s Q1 FY22 core net profit of RM418 million is below our and consensus’ expectations.

“Over the past five years, Q1 accounted for a higher range of 24 per cent–27 per cent of FY17–FY21 core earnings, while the underperformance mainly stemmed from increased fuel costs in which internal gas consumption is passed through under the incentive-based regulatory mechanism for gas transportation and regasification segments,” it added.

MIDF Research also reiterated its “buy” call with an unchanged target price (TP) of RM17.90 for PetGas.

“The calendar year 2022 (CY22) continues to beset the gas market with uncertainty, on the back of the Russian energy fuel sanctions amid tight global supply and increasing regional demand.

“Meanwhile, gas prices had been on an upward trend since the beginning of CY22, providing continuous capacity for the group to leverage on the price hike,” it said in a separate note today.

Nevertheless, MIDF Research opined that the risk of instability heeding global inflation would remain in the short-medium term.

“Given that the group had sustained its resiliency and strong performance across all of its facilities during the reporting quarter, we continue to view PetGas positively for the coming periods, based on its sustainable revenue and income stream and nearly full-plant utilisation.

“In consideration of Q1 FY22 results and the uncertainty over oil and gas price volatility in CY22, we revise our earnings forecast for FY22 and FY23 slightly downward by five per cent and four per cent respectively,” it said.

Kenanga Research has remained its “Market Perform” rating for PetGas which is supported by its decent yield, with a revised TP of RM17.51 from RM17.44.

“We maintain our forecast while our FY23 estimates have yet to factor in the new gas pipeline project.

“Going forth, we still like its resilient earnings profile which is well reflected in the share price,” it added. ― Bernama