reports
- Kong Ho Meng
Malaysia Marine And Heavy Engineering (MMHE MK) - 1Q25: Profits In Lin...
1Q25: Profits In Line, But Uncertain Outlook For Marine Repair MMHE reported commendable 1Q25 profits, aided by project close-outs, although marine is the star performer which recorded a profit base close to pre-2017 levels. The conversion jobs of LNG Puteri Satu and FPSO Bunga Kertas (one of the toughest in its category) might have factored into 1Q25, but contract replenishment is now a risk. We also view Petronas-Petros implications as a permanent mark on sector valuations. Under these assumpt...
- Kong Ho Meng
Oil & Gas - Geopolitical Risk May Extend to CCS, Allowing Sector Conso...
Geopolitical Risk May Extend to CCS, Allowing Sector Consolidation Regardless the details to be announced in PM Anwar and Sarawak Premier Jo’s new agreement later this week, we take a view that the Petronas-Petros geopolitical risk may prolong, extending to carbon storage (the next business frontier for the sector), until the shift of monetary flows are more balanced between the regions. If this happens, the sector will have breathing space to consolidate; hence, we continue to advise focusing o...
- Kong Ho Meng
Oil & Gas - Clear Water Muddled By “Grey Areas” — Simply Theatrics Or ...
Clear Water Muddled By “Grey Areas” — Simply Theatrics Or Chess Game? Petronas reported lower profit yoy amid a weakened LNG position and higher costs in 2024, due to various events including the Petronas-Petros development. Lately, some “misunderstandings” on the scope (i. LNG) and the correct DGO date are potentially precarious. If they are proven to be mere theatrics, then these matters should be resolved quickly. However, if the chess game prolongs, it will contribute towards sector risks. W...
- Arsit Pamaranont
- Benjaphol Suthwanish
- Carol Dou Xiao Qin
- Chong Lee Len
- Ejann Hiew
- Heidi Mo Jinghui
- John Cheong Ming Chern
- Jonathan Koh
- Kampon Akaravarinchai
- Kasemsun Koonnara
- Kong Ho Meng
- Llelleythan Tan Tan
- Paula Ruth
- Philip Wong
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
Regional Morning Notes - Thursday, February 20, 2025
GREATER CHINA Sector Dairy: Retail demand remains weak; price recovery and healthier inventories to drive shipment normalisation. Healthcare: Outperformers empowered by AI revolution. INDONESIA Update Champ Resto Indonesia (ENAK IJ/BUY/Rp585/Target: Rp740): 2025 revenue to grow 16% yoy; more conservative on 4Q24 performance. Maintain BUY. MALAYSIA Results Duopharma Biotech (DBB MK/BUY/RM1.28/Target: RM1.39): 4Q24: Largely delivers on earnings. Public sector sales anchor growth while margins im...
U11 UNITED OVERSEAS BANK LTD. (SINGAPORE)
5186 MALAYSIA MARINE AND HEAVY ENGINEERING HOLDINGS BHD
Z74 SINGAPORE TELECOMMUNICATIONS LIMITED
BCH BANGKOK CHAIN HOSPITAL PCL
SPRC STAR PETROLEUM REFINING
GMB GAS MALAYSIA BHD
DBB DUOPHARMA BIOTECH BHD
MPM MARCO POLO MARINE LTD
ENAK CHAMP RESTO INDONESIA TBK
STECON STECON GROUP PUBLIC COMPANY LIMITED
- Kong Ho Meng
Oil & Gas - O&G Landscape Entering “Right-Sizing” Mode
O&G Landscape Entering “Right-Sizing” Mode Petronas has confirmed a downsizing exercise, involving a review of 30% of its staff force, as it aims to be nimble for its survival. While this exercise is not driven by the Petros saga, we are concerned about the potential impact on the sector’s earnings, given its timing will coincide with heavy plant turnarounds. The Shell MDS injunction against Petronas/Petros implies more uncertainties. Should near-term earnings risk materialise, we advise accumul...
- Kong Ho Meng
Oil & Gas - PAO 2025-27: Rationalisation Across Three Regions
PAO 2025-27: Rationalisation Across Three Regions Despite being published remarkably later than usual, the PAO offers new insights, in particular activity outlook across three regions and clearer plant turnaround distinction between Upstream/Downstream/Gas segments. Aligning with our view, there are cuts in exploration-stage and JU rig outlook, but maintenance demand is largely intact. Plant turnaround is the biggest winner in our opinion, but we identified 2Q25, 2Q26 and 1Q27 as critical period...
- Kong Ho Meng
Oil & Gas - Sarawak And Petronas To Continue Strategic Collaboration I...
Sarawak And Petronas To Continue Strategic Collaboration In Gas Industry With Petros As Sole Gas Aggregator Both Prime Minister Anwar Ibrahim and Sarawak Premier Abang Johari (Abang Jo) released statements that there are no more issues and ambiguity in policy matters related to Petronas Nasional Bhd (Petronas), the country’s national oil company, and Petroleum Sarawak Bhd (Petros), Sarawak’s sole gas aggregator, regarding Sarawak’s gas distribution rights. Petros assumed the sole gas aggregator ...
- Anas Fitri Bin Ahmad
- Benjaphol Suthwanish
- Chong Lee Len
- Desmond Chong Chee Wai
- Heidi Mo Jinghui
- John Cheong Ming Chern
- Julia Pan Mengyao
- Kampon Akaravarinchai
- Kitpon Praipaisarnkit
- Kong Ho Meng
- Llelleythan Tan Tan
- Malaysia Research Team
- Ming San Soong
- Stevanus Juanda
- Tanaporn Visaruthaphong
- Wei Xiang Ku
Regional Morning Notes - Thursday, November 14, 2024
GREATER CHINA Results Tencent Holdings (700 HK/BUY/HK$403.80/Target: HK$570.00): 3Q24: Solid earnings beat; mini shop and potential blockbuster as key catalysts. INDONESIA Results Aspirasi Hidup Indonesia (ACES IJ/BUY/Rp835/Target: Rp1,200): 3Q24: NPAT up 13.7% yoy; slightly above consensus expectations. MALAYSIA Results Malaysia Marine and Heavy Engineering Holdings (MMHE MK/BUY/RM0.44/Target: RM0.70): 1H24: Positively surprises on project cost claims. Marine segment still weakened by competi...
PTT PTT PUBLIC COMPANY LIMITED
BN2 VALUETRONICS HOLDINGS
5186 MALAYSIA MARINE AND HEAVY ENGINEERING HOLDINGS BHD
PLANB PLAN B MEDIA
AWX AEM HOLDINGS
Z74 SINGAPORE TELECOMMUNICATIONS LIMITED
HANA HANA MICROELECTRONICS PCL
ACES PT ACE HARDWARE INDONESIA TBK
00700 TENCENT HOLDINGS LTD.
CPALL TB CP ALL
HAPL HAP SENG PLANTATIONS HOLDINGS BHD
VST VSTECS BHD
- Kong Ho Meng
Oil & Gas - FPSO Outlook Weighed Against Energy Transition
FPSO Outlook Weighed Against Energy Transition While the FPSO industry benefits from an all-time high backlog, we think players should sharpen their focus on decarbonisation/clean energy pathways, as we foresee diverging patterns in this “new field growth” depending on various factors. For example, it seems solar and wind will not be part of Bumi Armada and Yinson Production (the FPSO arm), even though wind is officially under SBM Offshore. MISC remains as a green transportation arm though it ma...
- Kong Ho Meng
Malaysia Marine And Heavy Engineering (MMHE MK) - 1H24: Surprise Profi...
1H24: Surprise Profit From Project Claims, Marine Diversification Bearing Fruit MMHE surprised positively with new milestone in profit and EBITDA in 2Q24, driven by project cost claims while existing projects execution remains unperturbed. This more than offset weakness in the marine segment which may find sustaining the high-margin contract pool to be challenging, amid intense competition. Fortunately, MMHE’s marine diversification is bearing fruit via a successful entry into the Greek maritime...
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Chong Lee Len
- Jo Yee Ng
- Johnny Yum Chung Man
- Jonathan Koh
- Kasemsun Koonnara
- Kate Luang
- Ken Lee
- Kenny Yong Hui Lim
- Kong Ho Meng
- Paula Ruth
- Roy Chen Chengzhi
- Sunny Chen
Regional Morning Notes - Thursday, August 22, 2024
GREATER CHINA Results Crystal International (2232 HK/BUY/HK$3.54/Target: HK$4.92): 1H24: Stronger 2H24, expect restocking into 1H25. CSPC Pharmaceutical Group (1093 HK/SELL/HK$5.68/Target: HK$5.00): 1H24: Results miss; major products face considerable price pressure. Downgrade to SELL. Geely Auto (175 HK/BUY/HK$7.88/Target: HK$13.00): 1H24: Core earnings up 108% yoy, in line with estimates. Maintain BUY. Target price: HK$13.00. Hong Kong Exchanges and Clearing (388 HK/BUY/HK$228.60/Target: HK$30...
00388 HONG KONG EXCHANGES & CLEARING LTD.
SXC SUNNY OPTICAL TECHNOLOGY (GROUP) CO. LTD.
5186 MALAYSIA MARINE AND HEAVY ENGINEERING HOLDINGS BHD
SATS SP SATS LTD.
01810 XIAOMI CORP. CLASS B
MAXIS MAXIS BHD
1833 PING AN HEALTHCARE AND TECHNOLOGY COMPANY LIMITED
1093 CSPC PHARMACEUTICAL GROUP LTD
CK CH. KARNCHANG PUBLIC CO LTD
2232 CRYSTAL INTERNATIONAL GROUP LTD
- Kong Ho Meng
Oil & Gas - Cautiousness in Business Enquiries: Signs Of Local O&G Cap...
Cautiousness in Business Enquiries: Signs Of Local O&G Capex Slowdown? Geopolitical risk may be the norm in the new world order, but we think this has been happening in Malaysia for the past six years. The highlight of this saga is when Petros took over the role of sole gas aggregator of Sarawak’s gas business, followed by major changes in Petronas’ top leadership roles. Although nothing is confirmed, channel checks suggest activities are slowing down. We advocate defensive stocks that are diver...
- Kong Ho Meng
Oil & Gas - Malaysia’s Positioning As Regional CCS Storage Hub
Malaysia’s Positioning As Regional CCS Storage Hub As we predicted, 2024 may be the year to evaluate Malaysia/Petronas’ CCS milestone. This is because Asia’s CCS projects are maturing, as major industries (ie emitters) take concrete action on emission targets. Malaysia is a clear beneficiary as a CCS storage hub, not only due to its local O&G fields and industries, but also strategically overseas emitters especially Japan and Korea. MISC, our sector top pick, is also a clear CCS beneficiary (LCO...
- Kong Ho Meng
Oil & Gas - MISC-Bumi Armada Is Better Off Collaborating In Certain Pr...
MISC-Bumi Armada Is Better Off Collaborating In Certain Projects Speculations of a merger might have lifted Bumi Armada’s (BAB) share price in the past month. While combining both FPSO fleets may propel the merged entity to Modec’s fleet size, alongside complementary geographical FPSO market presence, the stumbling blocks are too great in our opinion. There is a lack of financial synergies from the non-FPSO segments. If any, we think a collaboration in certain projects may generate more positive...
- Kong Ho Meng
Oil & Gas - Petronas Set To Embrace Volatilities In Net Zero Transitio...
Petronas Set To Embrace Volatilities In Net Zero Transition Petronas’ 1Q24 results showed that no business can escape the effects of volatility, as it experienced lower averaged realised prices, but higher costs. The local capex allocation for O&G and upstream achievements is overshadowed by the many uncertainties of existing projects (PRefChem) and the commercial settlement agreements with East Malaysia. Petronas remains steadfast in its target RM142b upstream capex for five years, with its foc...
- Kong Ho Meng
Malaysia Marine And Heavy Engineering (MMHE MK) - 1Q24: Rising Liquidi...
1Q24: Rising Liquidity Risks On Cash Flow May Offset Earnings Performance MMHE recorded a decent profit in 1Q24, but this was overshadowed by a significantly heightened liquidity risk, due to more working capital/cost provisions for existing projects. This also includes projects like Jerun CPP whereby MMHE delivered ahead of schedule but the asset owner guided for a delayed first gas target. For this reason, we retain our forecasts, but we still see value, as its current price assumes no cost re...
- Heidi Mo Jinghui
- Jacquelyn Yow Hui Li
- Jo Yee Ng
- John Cheong Ming Chern
- Kampon Akaravarinchai
- Kate Luang
- Keith Wee Teck Keong
- Kong Ho Meng
- Leow Huey Chuen
- Posmarito Pakpahan
- Shirley Wang Xueyi
- Stella Guo Yuting
- Wei Xiang Ku
- Ziv Ang Sze Champ
Regional Morning Notes - Monday, May 27, 2024
GREATER CHINA Sector Renewable Energy: Solar energy equipment: Spot prices free-falling across supply chain; industry entangled in a perfect storm of challenges. Initiate Coverage Miniso (MNSO US/BUY/US$22.13/Target: US$31.20): Mini toys, big joy. Small/Mid Cap Highlights Crystal International (2232 HK/BUY/HK$4.18/Target: HK$4.76): 1Q24: Positive order growth; eyeing dividend step-up. INDONESIA Results Bank Neo Commerce (BBYB IJ/BUY/Rp278/Target: Rp400): 1Q24: Turns a profit on strong top-line ...
- Kong Ho Meng
Oil & Gas - Volatility During Transition Period Of Retargeting Fuel Su...
Volatility During Transition Period Of Retargeting Fuel Subsidies While the implementation is with good intentions, the retargeting of diesel subsidy (under the SKDS 2.0 system) could lead to short-term stock volatilities for PetDag and Petron Malaysia, as well as the commercial/logistics companies involved. Ideally, the utilisation of the new fleet card system should have started on 1 Apr 24 in order to be on track for a full Jun 24 implementation, although there are some teething issues, espec...
- Kong Ho Meng
Oil & Gas - Petronas 2023: Commendable Financials Amid Rising Costs
Petronas 2023: Commendable Financials Amid Rising Costs Unlike previous years (of capex deferrals), Petronas’ 2023 capex is a testament that it is not only playing catch-up on its core business, but is also remaining true to its energy transition pathways. However, Petronas explicitly highlighted that domestic costs surged (despite lower revenue), and there is a low likelihood of oil prices and vessel rates continuing with the upward trend, while execution risks remain prevalent. We take the opp...
- Kong Ho Meng
Oil & Gas - OTC Asia 2024: Driving Excellence And Collaboration
OTC Asia 2024: Driving Excellence And Collaboration Petronas’ trademark Offshore Technology Conference (OTC) Asia 2024 is viewed as a successful platform that drives innovation (and showcasing of technology) and engagements. The industry is embracing the unknowns of energy transition and security, hence driving collaborations. Although none of them are easily near-term developments include Deleum, Uzma, MMHE, MISC, Sapura Energy and T7Global (NR). We retain sector OVERWEIGHT for now.
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