Petronas Gas advances in early trade

KUALA LUMPUR: Petronas ''Gas Bhd shares rose on Thursday, Aug 18 after posted net profit RM386.74 million on the back of revenue RM916.55 million for the three months ended June 30, 2011, due to higher gas processing revenue and utilities sales, and lower tax expense.

At 9.30am, Petronas Gas added 10 sen to RM13.64 with 46,000 shares traded.

MIDF Research maintained its Buy call on the stock and raised its target price to RM14.40 (from RM13.10) after incorporating Petronas Gas's net cash of RM1.27 per share.

The research house said this was to reflect better the company's intrinsic value, adding that its valuation for Petronas Gas was still pegged at unchanged 16.5x PER.

Petronas Gas is one of the defensive stocks that MIDF Research has identified as would outperform the market during uncertain period moving forward.

'We like PGas given its stable earnings, sustainable cash flows, net cash position and attractive 3.7% dividend yield.

'A cash rich company is also well positioned to acquire any earnings-accretive asset. In addition, potential listing of its 20-owned associate, Gas Malaysia Sdn Bhd, is another factor to generate buying interest,' the research house said in note Aug 18.

Petronas Gas rises at mid-morning

KUALA LUMPUR: Shares of PETRONAS GAS BHD [] advanced on Tuesday, June 21 in early trade as investors picked up the stocks in line with a positive outlook by analysts.

It rose eight sen to RM12.98 with 83,100 shares done.

OSK Research raised its target price to RM14, adding the share price had rallied by some 11.4% since it highlighted in its last report the vast growth potential for the company.

The research house was upbeat on the outlook for the upcoming second and third liquified natural gas (LNG) regasification terminals in Pengerang and Sabah, just as it is working on its first plant in Melaka.

"The LNG plants will not only lead to more gas transportation, processing and fixed reservation revenue, but the capex incurred should also drive down Petronas Gas' tax rate to below 20%." "Factoring in the lower tax rate, our forecasts are raised by 3% to 7%, while our discounted cashflow-derived fair value rises to RM14.00. We noted during our recent European marketing trip that interest in the counter was quite strong," it said.