Petronas Gas Bhd announced its 4th Gas Processing and Transmission Act (GPTA),

Petronas Gas: Buy, target price RM10.25

Published: 2010/04/02

MIDF has maintained its "buy" call on Petronas Gas Bhd (5681), after the latter announced its 4th Gas Processing and Transmission Act (GPTA), as it could offer strong earnings upside in the future.



Based on the research house's preliminary forecasts, the new structure could offer stronger earnings upside with earnings per share for 2011/2012 to be higher by more than 30 per cent.

"As a whole, we favour the new GPTA. We believes it unlocks the group's potential and highlights its gas supply reliability (over 99 per cent) and world-class capacity (99.5 per cent); surpassing world-class capacity of 98 per cent," it said in its research report this week.

The company is maintaining its fiscal 2011/2012 earnings revision for now, as the research house is expected to gather further clarification on the final details with Petronas Gas management next week.

Target price is maintained at RM10.25.