KazMunayGas: energy without the obstructions (BUY - transfer of coverage)
We transfer coverage of KazMunayGas (KMG), keeping our BUY rating, with an updated price target (PT) of KZT 15,100 (from KZT 13,452), offering upside of 23.8%. KMG is benefitting from a deficit of global upstream investment, while continuing to grow its own business. Two mega-projects, Kashagan and Tengiz, are getter even bigger, while an active exploration pipeline offers possible upside. It is taking advantage of feedstock advantages by building a petrochemicals business, while refining is being expanded further. Although geopolitics is a risk, alternative routes are available and co-dependence offers comfort. Low leverage and a well-defined dividend policy means that investors can rely on steady payouts. In a world where oil and gas companies trade at low multiples, KMG is lower than most, despite its growth potential. KMG trades at 4.2x P/E for 2024E and 3.4x for 2026E, on our forecasts.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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