PETGAS at a glance

 

Petronas Gas is expected to be the biggest beneficiary of rising gas demand.

Petronas Gas boosted by robust regasification segment

by Jonathan Wong jonathanwong@theborneopost.com. 

Posted on November 2, 2013, Saturday

KUCHING: Petronas Gas Bhd (Petronas Gas) saw a boost in its earnings driven by the recognition of deferred tax assets arising from an investment tax allowance granted for its liquefied natural gas  (LNG) regasification terminal in Melaka.

In addition, the company is expected to be the biggest beneficiary of rising gas demand as the additional gas volume will pass through its Peninsular Gas Utilisation (PGU) pipeline.

Analyst June Ng from HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) said that the earnings boost from Melaka regasification plant was driven by higher gas transportation revenue and contribution.

Ng added that second quarter 2013 (2Q13) net profit was boosted by RM592 million tax allowance granted to its LNG regasification terminal. Excluding the tax allowance, nine month core earnings of RM1.1 billion for 2013 was within the research firm and market’s expectations

“Gas production growth in Malaysia has lagged demand growth due to low subsidised gas prices at just one third of market rates. We expect a gradual increase in subsidised gas price under the ongoing move towards fiscal consolidation. Higher gas prices would encourage higher capital expenditure by Petronas and LNG imports.

“Petronas Gas will be the biggest beneficiary of rising gas demand as the additional gas volume will pass through its PGU pipeline. The outlook for Petronas Gas is promising with Petronas’ plan to invest RM15 billion to find new gas to meet rising demand in Peninsular Malaysia. It is also poised to secure overseas ventures given its strong balance sheet,” Ng explained.

The research division of MIDF Amanah Investment Bank Bhd (MIDF Research), however, noted that Petronas Gas’ normalised 9M13 earnings of RM1,175.1 million barely kept pace with estimates and represented a moderate growth of 5.9 per cent year-on-year (y-o-y).

According to MIDF Research, 9M13 revenue slumped marginally 0.3 per cent y-o-y to RM1,135.6 million as performance-based structure income were lower from decreased butane and ethane productions.

Higher income from propane helped offset the decline in the former.

However, operating profit climbed 5.8 per cent y-o-y resulting from accounting treatments – lower depreciation expense of property, plant & equipment (PPE) from reclassification of components and useful lives. Operating margins expanded three percentage points to 53.4 per cent.

“Segment revenue for 9M13 increased by RM47.9 million to RM885.6 million. This was caused by higher capacity booked by customers. In-line with the increase in revenue, segment operating profit grew 7.9 per cent y-o-y, supported by margin expansion of 1.5 percentage points to 78.6 per cent,” noted the research house.

Nevertheless, it expects Petronas Gas’ we are regasification segment to contribute around RM135 million and RM150 million to FY14 and FY15’s bottomline.

It increased its FY14 forecast earnings of the company, upwards by 12.1 per cent, assuming better ontributions from the LNG regasification segment.

HwangDBS Research retained a positive view on Petronas Gas and said, “We like Petronas Gas for its resilient earnings with no fuel risk, strong parental support, solid balance sheet, and promising growth prospects supported by Petronas’ larger O&G capital expenditure.

“It will also enjoy stronger earnings from the Melaka LNG plant, and Sabah power plant from FY14.”

Read more: http://www.theborneopost.com/2013/11/02/petronas-gas-boosted-by-robust-regasification-segment/#ixzz2jy4afYqq

Industrial stocks on my radar screen

Industrial Stocks on my radar screen
CBIP
Daibochi
Fima
Favelle Favco
Hartalega
Petgas
Scientex
Wellcall



CBIP

ROE 48.19%
EPS CAGR 5 Yrs 15.9%
DY High 7.0% - Low 4.7%
D/E 0.04
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 520.35 m
LFY Earnings 239.95 m
Gross Margin 86%
Market Cap RM 783.39 m
Shares (m) 272.01
Per Share price RM 2.88
P/E 3.26


Daibochi

ROE 16.38%
EPS CAGR 5 Yrs 23.2%
DY High 11.1% - Low 4.8%
D/E 0.20
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 278.75 m
LFY Earnings 24.64 m
Gross Margin 14.42%
Market Cap RM 413.28 m
Shares (m) 113.85
Per Share price RM 3.63
P/E 16.8


Favelle Favco

ROE 18.07%
EPS CAGR 5 Yrs 42.3%
DY High 5.2% - Low 2.9%
D/E 0.23
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 696.47 m
LFY Earnings 61.75 m
Gross Margin 17.08%
Market Cap RM 716.56 m
Shares (m) 212.00
Per Share price RM 3.38
P/E 11.60



FIMA

ROE 16.52%
EPS CAGR 5 Yrs 21.7%
DY High 5.5% - Low 3.7%
D/E 0.00
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 300.17 m
LFY Earnings 71.91 m
Gross Margin 45.69%
Market Cap RM 505.35 m
Shares (m) 80.47
Per Share price RM 6.280
P/E 7.03


Hartalega

ROE 32.51%
EPS CAGR 5 Yrs 40.5%
DY High 4.4% - Low 2.6%
D/E 0.04
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 931.07 m
LFY Earnings 201.38 m
Gross Margin 31.86%
Market Cap RM 4607.9 m
Shares (m) 732.58
Per Share price RM 6.29
P/E 22.9
DCA  Strong


Petgas

ROE 15.33%
EPS CAGR 5 Yrs 9.8%
DY High 4.2% - Low 2.9%
D/E 0.23
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 3576.77 m
LFY Earnings 1405.21 m
Gross Margin 49.49%
Market Cap RM 41,553.33 m
Shares (m) 1978.73
Per Share price RM 21.00
P/E 29.6
DCA  Strong


Scientex

ROE 15.96%
EPS CAGR 5 Yrs 16.2%
DY High 5.8% - Low 3.8%
D/E 0.11
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 881.03 m
LFY Earnings 83.92 m
Gross Margin 20.18%
Market Cap RM 1331.7 m
Shares (m) 230.00
Per Share price RM 5.790
P/E 15.9


Wellcall

ROE 28.82%
EPS CAGR 5 Yrs 9.2%
DY High 11.2% - Low 7.3%
D/E 0.00
Revenues Growing last 3 Years
Earnings Growing last 3 Years
LFY Revenues 154.19 m
LFY Earnings 23.34 m
Gross Margin 25.30%
Market Cap RM 316.87 m
Shares (m) 132.58
Per Share price RM 2.39
P/E 13.6


DCA = durable competitive advantage

Petronas Gas (15.8.2012)

Date announced 15-Aug-12
FYE  31/12/2012
Qtr Others
Quarter 30/6/2012
STOCK  PETGAS 
C0DE  6033 

Price $ 19.24
Curr. PE (ttm-Eps) 25.61
Curr. DY 2.60%

Dividends		% chg
Curr. FY0	50.00	0.0%
Prev FY1	50.00	0.0%
Prev FY2	50.00
Curr. DY	2.60%
Risk vs Returns
Upside	0.23	19%
Downside	1.00	81%
Returns
One Yr Apprec Pot.		2%
Avg Yield		4%
Avg Tot. Ann Return		6%
(for next 5 years)
INPUT VARIABLES
Today's Share Pr $		19.24
EPS GR %		7%
Avg H. PE		20.0
Avg. L. PE		15.0
Rec. Severe Low Pr		11.24
Current PE		25.61
Signature PE		17.50
RV		146%
Rational Price		13.15
Dividends
Present Dividend		50.00
Avg % DPO		69%
Present Div Yield		2.60%
Present High Yield		4.45%
EPS G. RATE		7%
Present Market Pr.		19.24

Petronas Gas

Petronas Gas
Year		DPS		EPS		Retained EPS
2003		30		33.2		3.2
2004		18.6		32.4		13.8
2005		30.8		41.6		10.8
2006		35.8		49.1		13.3
2007		38.3		63		24.7
2008		42.5		55.2		12.7
2009		48.7		48.7		0
2010		50		47		-3
2011		50		72		22
Total		344.7		442.2		97.5
2003-2011
EPS increase (sen)				38.8
DPO				78%
Return on retained earnings				40%
(Figures are in sens)

Petronas Gas versus Dutch Lady (A Comparative Study)

	8.3.2012			5.3.2012
	Petronas Gas			Dutch Lady
Income Statement
	31/3/2011			31/12/2011
	RM (m)			RM (m)
Revenue	3524.95			810.65
Gross Profit	1787.17			304.47
Operating Profit	1921.65			139.372
Financing costs	-20.10			-0.919
PBT	1901.55			141.553
PAT	1440.38			108.082
EPS (basic) sen	72.8			168.88
Balance Sheet
NCA	6881.563			74.048
CA	3493.725			324.465
Total Assets	10375.29			398.513
Total Equity	8393.908			259.154
NCL	1542.517			4.051
CL	438.863			135.308
Total Liabilities	1981.38			139.359
Total Eq + Liab	10375.29			398.513
Net assets per share	4.242			4.05
Cash & Eq	2756.079			193.143
LT Borrowings	423.58			0
ST Borrowings	0			0
Net Cash	2332.499			193.143
Inventories	100.399			93.448
Trade receivables	374.513			36.713
Trade payables	326.728			121.831
Quick Ratio	7.73
Current Ratio	7.96			2.40
Cash flow statement
PBT	1901.554			141.553
OPBCWC
Cash from Operations	2573.192			188.290
Net CFO	2233.579			161.940
CFI	-654.443			-7.135
CFF	-1009.326			-47.319
Capex	-478.366			-10.882
FCF	1755.213			151.058
Dividends paid	-989.365			-46.400
DPS (sen)	50.00			72.5
No of ord shares (m)	1978.732			64
Financial Ratios
Gross Profit Margin	50.70%			37.56%
Net Profit Margin	40.86%			13.33%
Asset Turnover	0.34			2.03
Financial Leverage	1.24			1.54
ROA	13.88%			27.12%
ROC	23.76%			163.73%
ROE	17.16%			41.71%
Valuation	8.3.2012			5.3.2012
Price	16.8			29.5
Market cap (m)	33242.70			1888.00
P/E	23.08			17.47
P/BV	3.96			7.29
P/FCF	18.94			12.50
P/Div	33.60			40.69
DPO ratio	0.69			0.43
EY	4.33%			5.72%
FCF/P	5.28%			8.00%
DY	2.98%			2.46%

Petronas Gas (At a Glance)

8.3.2012
Petronas Gas
Income Statement
	31/3/2011	31/3/2010	Absolute Chg	Change
	RM (m)	RM (m)
Revenue	3524.95	3221.84	303.11	9.41%
Gross Profit	1787.17	1178.36	608.81	51.67%
Operating Profit	1921.65	1258.50	663.16	52.69%
Financing costs	-20.10	-20.24	0.14	-0.69%
PBT	1901.55	1238.26	663.29	53.57%
PAT	1440.38	935.19	505.18	54.02%
EPS (basic) sen	72.8	47.3	25.50	53.91%
Balance Sheet
NCA	6881.563	6993.848	-112.29	-1.61%
CA	3493.725	2756.563	737.16	26.74%
Total Assets	10375.288	9750.411	624.88	6.41%
Total Equity	8393.908	7942.896	451.01	5.68%
NCL	1542.517	1583.279	-40.76	-2.57%
CL	438.863	224.236	214.63	95.71%
Total Liabilities	1981.38	1807.515	173.87	9.62%
Total Eq + Liab	10375.288	9750.411	624.88	6.41%
Net assets per share	4.242	4.014	0.23	5.68%
Cash & Eq	2756.079	2181.502	574.58	26.34%
LT Borrowings	423.58	437.682	-14.10	-3.22%
ST Borrowings	0	0	0.00	#DIV/0!
Net Cash	2332.499	1743.82	588.68	33.76%
Inventories	100.399	144.017	-43.62	-30.29%
Trade receivables	374.513	338.373	36.14	10.68%
Trade payables	326.728	192.022	134.71	70.15%
Quick Ratio	7.73	11.65	-3.92	-33.64%
Current Ratio	7.96	12.29	-4.33	-35.24%
Cash flow statement
PBT	1901.554	1238.260	663.29	53.57%
OPBCWC			0.00	#DIV/0!
Cash from Operations	2573.192	1794.760	778.43	43.37%
Net CFO	2233.579	1535.141	698.44	45.50%
CFI	-654.443	-321.970	-332.47	103.26%
CFF	-1009.326	-984.386	-24.94	2.53%
Capex	-478.366	-314.717	-163.65	52.00%
FCF	1755.213	1220.424	534.79	43.82%
Dividends paid	-989.365	-963.989	-25.38	2.63%
DPS (sen)	50.00	50.00	0.00	0.00%
No of ord shares (m)	1978.732	1978.732	0.00	0.00%
Financial Ratios
Gross Profit Margin	50.70%	36.57%	14.13%	38.62%
Net Profit Margin	40.86%	29.03%	11.84%	40.78%
Asset Turnover	0.34	0.33	0.01	2.82%
Financial Leverage	1.24	1.23	0.01	0.69%
ROA	13.88%	9.59%	4.29%	44.74%
ROC	23.76%	15.09%	8.68%	57.52%
ROE	17.16%	11.77%	5.39%	45.74%
Valuation	8.3.2012	8.3.2011
Price	16.8	11.7	5.10	43.59%
Market cap (m)	33242.70	23151.16	10,091.53	43.59%
P/E	23.08	24.76	-1.68	-6.77%
P/BV	3.96	2.91	1.05	35.87%
P/FCF	18.94	18.97	-0.03	-0.16%
P/Div	33.60	24.02	9.58	39.91%
DPO ratio	0.69	1.03	-0.34	-33.36%
EY	4.33%	4.04%	0.29%	7.26%
FCF/P	5.28%	5.27%	0.01%	0.16%
DY	2.98%	4.16%	-1.19%	-28.52%

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
22-Feb-12		31-Dec-11		Other	31-Dec-11		921,247		343,978		17.39		-
24-Nov-11		31-Dec-11		Other	30-Sep-11		927,324		350,091		17.70		-
17-Aug-11		31-Dec-11		Other	30-Jun-11		916,553		386,724		19.54		-
11-May-11		31-Mar-11		4	31-Mar-11		891,190		266,563		13.48		-

ttm-EPS  68.11 sen
Price  RM 16.72
PE (ttm) 24.5x

HwangDBS keeps 'buy' call on Petronas Gas

Published: 2012/01/14

KUALA LUMPUR: HwangDBS Vickers Research is maintaining its "buy" call on Petronas Gas Bhd (PetGas) with the target price raised to RM16.90 a share from RM15.50 earlier due to promising outlook in the oil and gas industry.

The research house, optimistic over the company's strong earnings growth from this year's financial year onwards, said the promising outlook for the industry is supported by new pipelines and regas plants.

It said strong earnings growth will be led by contributions from the Malacca regas plant in FY2012 and the Sabah power plant in 2013, whose shares eased four sen to RM15.40 on Bursa Malaysia at 11.30am yesterday.

Petronas Gas will be the prime beneficiary with the planned new pipelines in Terengganu and new regas plants in Pengerang and Lumut, it said in a statement.

It said the company was a main player in the current volatile oil and gas market and might be rerated with imminent news of project awards. Bernama

Read more: HwangDBS keeps 'buy' call on Petronas Gas http://www.btimes.com.my/Current_News/BTIMES/articles/HGAS/Article/#ixzz1nFnAnOXY

Gas Malaysia, Petronas sign new agreement

Published: 2012/02/24

KUALA LUMPUR: Gas Malaysia Bhd yesterday signed a new agreement with Petroliam Nasional Bhd (Petronas) to supply an equivalent of 492 million standard cubic feet per day (MMScfd) of natural gas.

The 10-year contract will start from January 1 2013, with the option to extend for another five years.

The new deal will replace the existing agreement for a total gas supply of 382 MMScfd, which will expire on December 31 this year.

The contract is aimed at providing a long-term supply security of natural gas to Gas Malaysia's existing customers, the company said in a statement yesterday.

The additional 110 MMScfd will enable it to expand its supply to new customers, it added.

Gas Malaysia was incorporated in 1992 to sell, market and distribute natural gas as well as construct and operate the natural gas distribution system within Peninsular Malaysia. 

It is owned by MMC-Shapadu (Holdings) Sdn Bhd (55 per cent), Tokyo Gas-Mitsui & Co (Holdings) Sdn Bhd (25 per cent) and Petronas Gas Bhd (20 per cent).

Read more: Gas Malaysia, Petronas sign new agreement http://www.btimes.com.my/Current_News/BTIMES/articles/gess/Article/#ixzz1nFhoIvPU

Malaysia's Petronas posts 54 pct profit rise; warns of 2012

By Min Hun Fong and Viparat Jantraprap

KUALA LUMPUR | Thu Dec 1, 2011 5:40am EST

Dec 1 (Reuters) - Malaysia's state oil firm Petronas posted a 54 percent increase in second-quarter profit on Thursday, helped by better crude oil prices and a stronger dollar.

The company warned however, the trend would not continue into next year. Petronas' president and CEO, Shamsul Azhar Abbas, told reporters that higher market volatility stemming from the price of oil, the eurozone crisis and an uncertain American recovery would impact its bottomline.

"I will not be surprised if the second recession were to come next year," he said.

Petronas was on track to meet its full-year pretax profit forecast of 70 billion ringgit ($22.02 billion) to 75 billion ringgit ($23.60 billion) for its nine-month fiscal year ending Dec. 31, Shamsul added.

Petronas reported a second-quarter net profit of 18.3 billion ringgit, which was 53 percent higher than the 11.9 billion ringgit from a year ago.

At the same time, Petronas said it was looking to cast a wider net around oil and gas assets in the region and has put in a bid for exploratory rights in Myanmar's on-shore blocks.

"At the moment in Myanmar we are only offshore and the business has been quite good," executive vice president of exploration and production, Wee Yiaw Hin said. "There has been recently a bid on the onshore block and we are looking at opportunities to go onshore in Myanmar."

Wee said the bidding process will end some time next year. He added that he was not aware of any other Malaysian companies bidding for the same blocks.

Petronas is facing depleting oil and gas reserves in Malaysia and has stepped up its deep-water exploratory activities as well as re-exploring marginal fields.

Meanwhile, Shamsul said Petronas was contemplating entering Japan's power industry because of the island nation's commitment to reduce its dependency on nuclear power.

Petronas bought a 30 percent stake in Singapore power concern GMR Energy (Singapore) Pte Ltd, which was its first foray into the international power business.

NORMALISATION OF GAS SUPPLY

Shamsul said Petronas has taken a number of steps to normalise the supply of natural gas in Malaysia, which has crippled the power production sector in the country.

A disruption in the supply of gas since the second quarter of this year has forced national power producer Tenaga Nasional to switch to more expensive alternative fuels.

Shamsul said Petronas would help pay for a third of the additional fuel cost incurred from the gas shortage but "would not fund inefficiencies."

"We need to ascertain from Tenaga whether (the additional fuel cost is) 3 billion ringgit...and not due to their own inefficiencies. We are not prepared to fund inefficiencies," Shamsul said.

He said the company was in the planning stages of building another regassification plant in Lumut, Perak, in addition to two plants already under construction.

The regassification plant in Melaka is expected to come online in the second half of 2012.

Shamsul said the gas supply disruption in Malaysia was expected to continue until the Melaka plant was in operation. Malaysia's energy minister had earlier said that the disruption would last "two to three months."

Petronas was also fast-tracking the construction of two floating natural gas production plants in East Malaysia, which will come online by 2016.

($1 = 3.1785 Malaysian ringgit) (Reporting by Min Hun Fong)

http://www.reuters.com/article/2011/12/01/petronas-idUSL4E7N11YH20111201

Malaysia eyes first gas in 2013 for $5.1 bln project

Tue Aug 23, 2011 2:57am EDT

* Petronas to develop nine offshore marginal gas fields

* Will also build a 200 km pipeline to transport gas

* Says subsidised gas prices have curbed investment

* Says offshore production facilities running at full capacity 

By Niluksi Koswanage

KUALA LUMPUR, Aug 23 (Reuters) - National energy company Petronas will develop a $5.1 billion gas project off Malaysia's east coast with first delivery expected in two years, helping to bolster the country's slowing output and meet soaring power demand.

The North Malay Basin project was unveiled on Tuesday as the Southeast Asian gas exporter faces a shortage due to frequent maintenance shutdowns, forcing state utility Tenaga Nasional to import costly fuels for power generation.

The new project comprises nine discovered gas fields about 300 kilometres (186 miles) off the east coast of peninsula Malaysia. Petronas will also develop a 200 km pipeline to transport the gas from the fields to Terengganu state.

The project is part of a greater drive to secure gas including that with high CO2 content and from marginal domestic fields, as well as taking stakes in overseas fields with an eye for LNG production.

Petronas recently made two other gas discoveries in shallow waters off the Borneo coast, and inked preliminary deals with Qatargas to supply 1.5 million tonnes of liquefied natural gas (LNG) annually over 20 years.

"Petronas expects the additional volume of gas from the North Malay basin project would help sustain supply to its customers in peninsula Malaysia," it said in a statement.

"The project, which entails numerous upstream commitments, is expected to encourage more investments by industry players."

Petronas and its production sharing partners will accelerate the process with first delivery of 100 million standard cubic feet (mmscfd) of gas per day expected by 2013, ramping up to 250 mmscfd by 2015, the company said.

It did not name its partners in the project but Petronas has previously inked production sharing contracts (PSCs) with the likes of oil majors Exxon Mobil Corp and Royal Dutch Shell (RDSa.L).

Shares in Petronas Gas , which controls the gas production facilities and pipelines in the country, rose 0.5 percent to 13.5 ringgit by midday.

LOW GAS PRICES CURB INVESTMENT

Gas demand from Malaysia, the world's No.2 LNG exporter behind Qatar but fell to third place last year, has risen by more than 30 percent thanks to regulated domestic prices that are significantly lower than global market rates.

Prime Minister Najib Razak's government has pledged to raise gas prices every six months, making it more economically feasible to industry players to invest in developing marginal gas fields such as the North Malay Basin project.

"The planned price reform measures will benefit Malaysia by stimulating upstream investment off the peninsular and provide the long-term price signal to ensure security of supply by attracting LNG as well," said Graham Taylor, analyst with Wood Mackenzie in Singapore.

Petronas is scheduled to complete a 3 billion ringgit regasification terminal with an annual capacity of 3.5 million tonnes on mainland Malaysia by the middle of next year. It is studying plans for the second terminal.

Petronas also has long asked for the government to allow it raise gas prices in order to reduce the hefty annual subsidies of about 18-19 billion ringgit it pays out.

"These subsidised gas prices have resulted in minimal investments in the exploration and development of gas projects by oil and gas players, constraining growth in supply capacity," the company said.

"Compounding this tight situation, Malaysia's offshore production facilities have been running at full capacity, exerting tremendous pressure on gas production systems."

Last week, Tenaga Nasional bought 130,000 tonnes of fuel oil for power generation, the third time it has bought large volumes this year, at higher price levels.

The purchases, which started in the second quarter, have been due to a prolonged gas shortage that has resulted in the country's power sector receiving a third less of its allocation by Petronas. ($1 = 2.970 Ringgit) (Additional reporting by Rebekah Kebede in PERTH; Editing by Liau Y-Singand Ramthan Hussain)

http://www.reuters.com/article/2011/08/23/malaysia-petronas-idUSL4E7JN0N020110823?type=companyNews