The marine charter business has caused a lot of headaches for the Bursa oilfield services companies. This is best illustrated by the ROE of Dayang and Deleum. https://i.postimg.cc/Z5kNLQT1/Dayang-vs-Deleum.png
Both are in the topside maintenance services business. The different between them was that Dayang ventured into the marine charter business in the early part of the last decade
In 2023, the Bursa Malaysia energy index grew at 5.4 %. In contrast, the S&P 500 energy index contracted at 3.7 %. WTI crude oil prices contracted by 9.9 %
Of course the composition of the companies making up the indices for Bursa Malaysia are different from that for the S&P 500.
If you are hunting for oil and gas companies to invest in, doesn’t it makes sence to look at Bursa Malaysia counters. In this context, Deleum looks like a good candidate. https://www.youtube.com/watch?v=WVC1fVZzyaw
It did well when crude oil prices were high. But when oil prices were in the trough part of the cycle during 2015 to 2019, the company performance deteriorated. Its performance improved over the past 2 years due to the better crude oil prices. Over the cycle, the Group delivered average returns that were greater than its cost of funds. The Group is also financially sound When you compare Deleum ROE trend with the share price trend, do you think that there is still an opportunity to go in? https://i.postimg.cc/KYPBhG5m/Deleum.png
Deleum – market is pricing a collapse of crude oil price
As an oilfield services group, Deleum’s performance is closely tied to crude oil prices. It improved when oil prices were high, but deteriorated during low-price periods (2015-2019).
Recent years have seen a performance rebound due to better oil prices. Over the cycle, the Group delivered average returns that were greater than its cost of funds. The Group is also financially sound.
My valuation based on the performance over the cycle showed that there is more than a 30% margin of safety based on the market price of RM1.29.
Do you believe that crude oil prices will continue to be high or is due to collapse? I think the market is pricing Deluem anticipating a collapse in the crude oil price. Is this realistic?
in the video she did mention that this stock price will be swayed by the crude oil price too. i see recently crude oil prices been coming down, that could be the reason for Deleum stock price coming down too :(
Oil price does affect this stock somewhat, but its all sentiment, business wise, they are petronas OPEX contractor, meaning they help maintain petronas assets, they'll do well as long as they get contract to help maintain the assets, stable business wont experience big boom during high oil price, but wont b affected as badly in low oil price
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
hng33
20,502 posts
Posted by hng33 > 2023-08-30 12:25 | Report Abuse
sold at 92.5sen