• Maintain HOLD (TP: RM16.75). Petronas Gas Berhad (PetGas) 9MFY24 net profit of RM1.5bn was in line with our and consensus expectations at 78% and 79% respectively. 3QFY24 earnings rose 10% YoY to RM541mn primarily due to i) favourable forex movements on USD lease liabilities at RGT Pengerang (RGTP) amid MYR strengthened, ii) higher customer offtake in utilities segment despite lower ICPT, and iii) better contributions from joint ventures and associates (+44% YoY). A third interim DPS of 18sen was declared, bringing the YTD to 50sen which is similar to YTD23. No changes to our forecasts. Maintain a HOLD call on PetGas with higher DCF derived TP of RM16.75 (from RM16.52) as we roll our valuation to FY25.

• Key Highlights. PetGas guided that the maximum PBS (Performance Based Structure) incentive for extracting ethane, propane, butane or C2, C3, C4 gas under the Gas Processing segment is

• Earnings Revision. No changes to our forecasts.

• Outlook. We expect 4QFY24 performance to be affected by the reversal in forex movement for the RGTP jetty lease in tandem with weakening MYR as well as higher depreciation and maintenance activities. Currently, the Pengerang LNG storage expansion project and the new gas compressor in Jeram are making steady progress, with anticipated completion dates set for mid-2025 and 2026, respectively. The group has also achieved the Letter of Notification (LON) for 100MW new power plant in Kimanis and Initial Letter of Notification (ILON) for Labuan 120MW power project. PetGas also guided 2025 capex could be higher for growth project and non-regulated business.

Source: BIMB Securities Research - 28 Nov 2024