KLSE: PETGAS (6033)       PETRONAS GAS BHD MAIN : Utilities
Last Price Today's Change   Day's Range   Trading Volume
16.76   -0.04 (0.24%)  16.52 - 16.82  1,867,400
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Market Cap: 33,164 Million
NOSH: 1,979 Million
Avg Volume (4 weeks):1,040,131
4 Weeks Range:16.20 - 16.96
4 Weeks Price Volatility (%):
52 Weeks Range:15.24 - 17.96
52 Weeks Price Volatility (%):
Average Price Target: 18.54
Price Target Upside/Downside: +1.78

Financial Highlight

Latest Quarter | Ann. Date 30-Sep-2021 [#3]  |  22-Nov-2021
Next QR | Est. Ann. Date: 31-Dec-2021  |  22-Feb-2022
T4Q P/E | EY: 16.26  |  6.15%
T4Q DY | Payout %: 4.59%  |  74.70%
T4Q NAPS | P/NAPS: 6.581  |  2.55
T4Q NP Margin | ROE: 38.70%  |  15.66%


Date Subject
01-Dec-2021 上升股:国油气体 阻力RM17.34
23-Nov-2021 PublicInvest Research Headlines - 23 Nov 2021
23-Nov-2021 Petronas Gas - 3QFY21 In Line; Cut To MP
23-Nov-2021 Petronas Gas - Sustained 9MFY21 Performance
23-Nov-2021 Petronas Gas - Hopeful for higher dividend payouts
23-Nov-2021 Mplus Market Pulse - 23 Nov 2021
22-Nov-2021 Petronas Gas records lower Q3 net profit of RM580.8mil
22-Nov-2021 Petronas Gas - Adjusting for Prosperity Tax Impact
26-Oct-2021 Mplus Market Pulse - 26 Oct 2021
26-Oct-2021 PublicInvest Research Headlines - 26 Oct 2021
21-Oct-2021 [转贴] [Video:浅谈PETRONAS GAS BHD, PETGAS, 6033] - James的股票投资James Share Investing
18-Oct-2021 Utilities - Surge in Energy Price
30-Sep-2021 Utilities - Defensive Prospects
23-Sep-2021 Oil & Gas - Rising hydrogen prospects
18-Sep-2021 上升股:国油气体 阻力RM17.88
08-Sep-2021 油价虽走高 疫情影响 油气业次季释出合约仅22亿
07-Sep-2021 Oil & Gas Sector - Upward earnings trajectory
30-Aug-2021 Oil & Gas - Capex to Rise in 2H21
30-Aug-2021 Oil & Gas - Lower Petronas capex amid stronger results
24-Aug-2021 【行家论股/视频】国油气体 拓新业务无损派息

Business Background

Petronas Gas Bhd is a Malaysian gas infrastructure and utilities company of which Malaysia’s nationalized oil corporation, PETRONAS, holds a majority interest. Petronas Gas segments its primary operations into Gas Processing, Gas Transportation, Utilities, and Regasification businesses. While each of these contributes significantly to the company’s total revenue, its Gas Processing and Gas Transportation units combine to generate the majority. In Gas Processing, Petronas Gas receives processing fees under multi-year contracts by processing natural gas piped offshore for its parent company, PETRONAS. The Gas Transportation business encompasses the transmission of offshore natural gas through pipelines to customers in Malaysia and Singapore under multi-year agreements with PETRONAS.
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  2 people like this.
observatory @unicorn,

I searched in 2020 Annual Report. It states that "Launch of LNG Reloading service at RGTSU for PETRONAS LNG bunkering services, the first in Southeast Asia". Basically, PetGas regasification terminal at Sungai Udang works like a gas station for ships. It sells Petronas LNG to LNG-powered vessels, quite similar to PetDag stations selling to LNG-powered taxis.

I've googled to learn more about LNG bunkering. This article explains how bunkering is performed.
Source: https://www.klawlng.com/lng-applications/lng-vessel-bunkering/

LNG-powered vessels become popular because ports have banned/ imposed surcharges on vessels using high sulfur marine fuels in their effort to control air pollution. The second driver is climate change.
Source: https://www.bbc.com/news/uk-scotland-51114275

I don’t think LNG bunkering involves the Sino-American geopolitics.
12/07/2021 12:42 PM
unicornbird you're right. the bunkering is not transshipment. So Petgas only pump fuel for the ships
the market will grow in 10X by 2027. The Sino US clash will result in more China ships choosing to bunker with Petgas, as China try to build up it's own non-US supply chain.

If Petgas really dominate the LNG bunkering market in Straits of melaka, then it's a huge deal. 30% of ships in the world pass through the strait.

Global LNG bunkering market size was valued at $0.38 billion in 2019, and is projected to reach $5.14 billion by 2027, growing at a CAGR of 45.2% from 2020 to 2027. LNG bunkering is the process of transferring LNG to a ship for its own consumption. The advantages of using LNG as a marine fuel in the shipping industry include less shipping emissions, lower operating & shipment costs, safety, non-toxic, and others. Stringent environmental regulation toward pollution caused by ship transportation is expected to be the primary growth factor in the LNG bunkering market
12/07/2021 6:00 PM
unicornbird Petgas may partner Dialog, and use Pengerang for transhipment

LNG trans-shipment: This is a highly likely option. While PLNG-2 is only providing regasification services for now, Petronas Gas stated that the joint venture could also offer such services to ‘other potential third party customers’.
12/07/2021 7:26 PM
observatory Good info.

Globally there were 118 and 143 LNG-powered vessels in 2017 and 2018. Currently this is still a very small market.

Source: https://www.maritime-executive.com/editorials/2019-will-be-the-year-of-acceleration-for-lng-as-marine-fuel

According to the 2020 Annual Report, the LNG bunkering asset has a book value of only RM31 million. The first LNG bunkering only took place as recent as in Oct 2020. We can keep an eye on how fast the business grows in 2021. I would expect more capex spending if this business can really gain traction.

We can also make some guesstimate on the future market potential based on the articles you've shared. Your article forecasts the global LNG bunkering market to reach ~USD5 billion or RM20 billion by 2027. Your other earlier article says MIDA expects Malaysian market size to reach RM2 billion (no timeline given).

Let’s assume the RM2 billion market is completely captured by PetGas. Revenue wise it's sizeable given 2020 revenue was only RM5.6 billion. However this could be a low margin business. If LNG bunkering is like a gas station business as operated by Petronas Dagangan, the net margin is only 2%, or about RM40 million net profit out of RM 2billion revenue. At this scale the net profit will be rather insignificant as compared with 2020 net profit of about RM2 billion.

Actually there are other ancillary services mentioned in the Annual Report, such as the LNG Truck Loading and Gassing Up Cooling Down (GUCD) services. However no indication has been given on how large these non-regulated business could grow to in the future.
12/07/2021 8:02 PM
observatory Based on my limited understanding, the LNG trans-shipment business refers to the GUCD services. The facilities are available in Sungai Udang and Pengerang.
12/07/2021 8:05 PM
unicornbird Bunker = RM 6 b (i made a mistake earlier)
Bunker Net profit = 2% X 6b = 120m
Impact on Petgas Net profit = 120m/2b = 6% (not much)

Let's observe if transhipment can do well. Probably that's better because the volume is much higher
13/07/2021 8:09 AM
kpowersohai fly soon......fund manager accumulating...
19/07/2021 11:15 AM
Banana John flying to south...
22/07/2021 8:46 PM
Banana John below 15 soon.... yeah
24/07/2021 5:45 AM
lionel messi I hope so too but fat hopes.
24/07/2021 10:04 AM
Bgt 9963 Post removed. Why?
24/07/2021 10:20 AM
nnara2401 i wish i had some money to buy now
30/07/2021 5:30 PM
kpowersohai whoever not yet having this stock in your portfolio or not have enough units yet. go to yr calendar and mark 2 august, then topup your brokerage account. once hit 9am this coming 2 August just place order and get whatever amount units u afford to buy.
30/07/2021 6:32 PM
Banana John As mention before
will break 15.
30/07/2021 7:14 PM
Bgt 9963 Post removed. Why?
31/07/2021 9:10 AM
lionel messi I hope so. The cheaper the better. Solid blue chip.
01/08/2021 9:30 AM
Bgt 9963 Post removed. Why?
01/08/2021 10:20 AM
James Ng https://klse.i3investor.com/blogs/general/2021-08-01-story-h1568906147.jsp
[转贴] [Video:浅谈PETRONAS GAS BHD, PETGAS, 6033] - James的股票投资James Share Investing
01/08/2021 7:28 PM
kpowersohai seriously undervalued company.....cincai2 also can at the very least worth rm16 per share. buy when the price dropped....whoever listen to my advice a few days ago now can sleep happily ady.
03/08/2021 8:41 PM
Bgt 9963 Post removed. Why?
03/08/2021 9:22 PM
04/08/2021 4:15 PM
Bgt 9963 Post removed. Why?
04/08/2021 5:02 PM
traintobullland Dividend announcement should be very soon hehe
04/08/2021 11:43 PM
Bgt 9963 Post removed. Why?
11/08/2021 8:55 AM
DickyMe Dzulkefly bin Ahmad for Prime Minister.
16/08/2021 10:23 AM
Keyman188 Blow water never wipe mouth...

Old man always saying...human behavior very very hard to change...

16/08/2021 10:27 AM
thetruthstory today last day to accumulate for dividens
06/09/2021 12:10 PM
Banana John today volume sipek high. seems someone throwing out the share before dividend.
06/09/2021 8:58 PM
kpowersohai Buy low, sell high. Drop lower, buy more! Thats the game plan for counter like petgas.
07/09/2021 11:49 AM
Banana John what happen last minutes shoot so-hai.... something wrong
08/09/2021 7:42 PM
patrico8 Manipulation
08/09/2021 7:46 PM
Banana John another manipulation today... last minute shoot so-hai.
I guess the idea behind is to make klci not so ugly... last 15 minutes transaction around 900k unit and cost around 16m. does it worth to push the index?
17/09/2021 8:40 PM
Banana John hehe... drop to previous level. still got another 15m to push the price?
20/09/2021 4:34 PM
kpowersohai happy with this counter, the best purchase for this year. stock price increases and at the same time collect dividen (passive income). best example of passive income done at the right time.
22/09/2021 7:08 PM
masterus S. crude oil price tops $80 a barrel, the highest since 2014
Pippa Stevens
West Texas Intermediate crude futures topped $80 on Friday for the first time since 2014.
Oil is up more than 60% for 2021 as demand rebounds while supply remains tight.
The Department of Energy said Thursday it has no immediate plans to take action to alleviate the price surge.
09/10/2021 11:06 PM
observatory From yesterday Star


Key takeaways:
1. Revenue and earnings are stable despite spike in global gas price. This is because gas tariffs are regulated and the long term gas processing agreement with Petronas.
2. Despite decarbonization and phasing out of coal, surge in gas demand is only likely after 2030
3. Limited growth as most gas processing and regassification facilities have already been taken up by Petronas.
4. While more demand may come from third-party access agreement as part of Malaysian gas market liberalization, the pace may be slowed down by hike in global spot price.
5. Annual CapEx of ~ RM1 billion in the next 3 years
6. Look into future opportunity like hydrogen and setting up CoGen power plants in industrial parks.
10/10/2021 3:21 PM
Alan Teh With the current price right now should I invest on this stock?
19/10/2021 5:48 PM
masterus Forget $100, Options Traders Now Betting On Oil Prices Hitting $200
Speculative traders are betting on the options market that oil could exceed $100 a barrel by the end of this year and even reach a record $200 per barrel by the end of 2022
20/10/2021 12:18 PM
observatory It’s important to note that Petronas Gas is predominantly a utility company, not an oil & gas company. Don’t be deceived by the name “Gas”. The CEO already explains in The Star article I shared that its revenue and profits will not be much affected by gas price volatility.

In the research reports I read most analysts use the Sum of the Parts (SOP) valuation method – valuing different businesses independently and sum up the value.

I will do a sanity check on PetGas fair value based on a simpler approach. The starting point is I believe the current share price is not grossly over or undervalued. For a large cap company like PetGas, which is followed by many analysts and owned by many institutions, any major gap between price and value cannot persist for long. Opportunities will be identified and exploited, and share price corrected.

Based on current market price, I shall work backward to understand what are the assumptions behind. If the assumptions make sense, then the current market price will also make sense.
20/10/2021 9:43 PM
observatory The characteristics of PetGas are earning growth is slow but stable. It distributes most of its earnings as dividends with quarterly distributions. This means the simple Gordon Growth Model can be used.

Past dividend records show that
1) From FY2007 to FY2010, DPS was RM0.50.
2) In FY2015, DPS was RM0.60
3) In FY2020 (latest full financial year), DPS was RM0.72 (excluding special dividends)

Using a CAGR calculator, its shows that dividend CAGR over the past 10 years is 3.7%, and over last 5 years is also 3.7%. The dividend has been growing at a nominal rate of about 3.7%. For context, in the 2010’s decade Malaysia GDP grew at about 4% to 5% in real term, or about 6% to 7% in nominal term.

Malaysia GDP growth rate will slow gradually in coming years (in Sep World Bank projected 5.8% in 2022 and 4.5% in 2023, in real term). So I shall make a bold assumption that PetGas future dividend growth rate is at a constant 3%.
20/10/2021 9:50 PM
observatory Next is cost of equity (COE).

PetGas is stable company, a reliable dividend stock with good corporate governance. It enjoys gas distribution monopoly. Its revenue and profits are shielded from gas price fluctuation as it’s largely determined by Regulatory Asset Based pricing, and the long term gas processing agreement with its parent company Petronas.

Besides the demand for natural gas is likely to persist for at least several more decades as gas is the cleanest form of fossil energy. The Energy Commission projects gas demand to increase from 2030 onwards by replacing coal in power generation.

Based on above I will assign my own standard of “good” company COE which is 8%.

Cross check my choice against CAPM model:
Beta = 0.75 (average of Reuters 0.87, and Market Watch 0.65)
Risk free rate = 3.6% (based on latest Malaysia government 10 year bond yield)
Equity risk premium = 5.9% (based on Damodaran)
CAPM COE = 3.6% + 0.75*5.9% = 8%, which coincidentally fits almost perfectly at this moment.
20/10/2021 9:50 PM
observatory Given FY2020 DPS = RM0.72, FY2021 DPS is projected to be RM0.72 * (1 + 3%) = RM0.7416
Applying the Gordon Growth Model, value per share
= next year dividend / (COE – growth rate)
= RM0.7416 / (0.08 – 0.03)
= RM14.83
20/10/2021 9:50 PM
observatory However, there is still value to be extracted from PetGas. The company has an overly conservative balance sheet which is slightly net cash. Given its stable operating cashflow, it should be able to assume more debt without compromising on its financial health.

Based on the latest Financial Position as of 2QFY21, net cash = RM3,455m – RM3,306m – RM147m = RM2m. Its cash and borrowings are roughly in balance.

Shareholders’ Equity = RM12,745m. Assume its optimal net debt to equity ratio is 30%, it can release RM12,745m * 30% = RM3,824m of capital as future special dividends.

Dividend by number of shares, potential special dividend per share = RM3,824m/ RM1,979m = RM1.93

(Note: Capex per year is slightly above RM1 billion. I assume it will fund next 3 to 4 years of capex mostly with borrowings, and return the excess operating cash received in the form of special dividends.

If that happens, can expect 48 to 64 sens of special dividends per year for next 3-4 years, providing a one time boost of dividend yield from RM0.74 / RM17 = 4.4% to 7.2%- 8.1%.

Rightfully the assumed future special dividends should be discounted back to present value based on 8%, but I just ignore the effects)
20/10/2021 10:00 PM
observatory Adding to the earlier value calculated from Gordon Growth Model, the value per share = RM14.83 + RM1.93 = RM16.76.

This is close to the current market price at about RM17.

Of course, Gordon Growth Model is a simplistic method. Besides like any other discounted cashflow method that projects cashflows into eternity, any slight change in assumptions could give vastly different result.

Another factor not considered is the tariff for Regulatory Period 2 (RP2) for Year 2023 to 2025. The future tariff as determined by Energy Commission in 2022 will affect share price.

Putting aside these factors, if one believes the assumptions used are reasonable, then current market price should also be reasonable. If the price is right, it will mean over a long period of time, a long term shareholder who purchases PetGas at today price can expect an annual rate of return of about 8% (the cost of equity).
20/10/2021 10:00 PM
0008 Post removed. Why?
20/10/2021 10:11 PM
Alan Teh thanks for the information
21/10/2021 11:14 AM
James Ng https://klse.i3investor.com/blogs/general/2021-10-21-story-h1592824633.jsp
[转贴] [Video:浅谈PETRONAS GAS BHD, PETGAS, 6033] - James的股票投资James Share Investing
21/10/2021 9:01 PM
masterus Brent Oil Hits $86 On Dwindling U.S. Inventories
By Tsvetana Paraskova - Oct 21, 2021, 9:15 AM CDT
Brent Crude prices hit $86.10 per barrel early on Thursday, jumping to the highest level in three years, before retreating to just above $85 amid profit-taking.

Driven by signs of tighter oil supply and a bullish EIA weekly inventory report on Wednesday, oil prices rose early on Thursday, with the international benchmark, Brent Crude, rallying to $86.10—the highest price since October 2018. The U.S. benchmark, WTI Crude, settled at a fresh seven-year high on Wednesday and was up early on Thursday before pulling back later in the morning.
22/10/2021 7:29 PM
Colgate 这只股票还能买吗?看起来很贵。
27/10/2021 7:22 AM
unicornbird this stock is for old people
01/12/2021 8:35 AM


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