Petronas Gas’ (PTG) FY12 core net profit beat our numbers but was in line with consensus, making up 105.6% and 98.5% of both estimates respectively. Its FY12 total 50 sen dividend also surpassed our projection of 47 sen. Following our internal coverage revamp, we have revisited our financial model and tweaked our DCF valuation after adjusting our forecasts. We upgrade the stock from SELL to NEUTRAL, with a RM18.53FV.
Lifted by disposal of its investment in Gas Malaysia. PTG’s full year net profit was 5.6% above our forecasts due to slightly lower than expected year-end cost provisions as well as better than expected sales from its utilities division. Revenue dipped by a marginal 2.2% y-o-y due to lower revenue contribution from its gas processing business (down 12.0% y-o-y) but core net profit grew 4.3% y-o-y, lifted by a RM100m gain arising from the partial disposal of its investment in Gas Malaysia via an initial public offering. Stripping off the disposal gain, PTG’s core net profit would have come in 2.2% lower y-o-y.
Lifted by disposal of its investment in Gas Malaysia. PTG’s full year net profit was 5.6% above our forecasts due to slightly lower than expected year-end cost provisions as well as better than expected sales from its utilities division. Revenue dipped by a marginal 2.2% y-o-y due to lower revenue contribution from its gas processing business (down 12.0% y-o-y) but core net profit grew 4.3% y-o-y, lifted by a RM100m gain arising from the partial disposal of its investment in Gas Malaysia via an initial public offering. Stripping off the disposal gain, PTG’s core net profit would have come in 2.2% lower y-o-y.
Dishing out a FY12 total dividend of 50 sen. PTG also declared a single tier final dividend of 35 sen per in respect of the financial year ended 31 Dec 2012, subject to shareholders’ approval at the forthcoming annual general meeting. This amount, combined
with the 15 sen interim dividend it paid in September 2012, will bring its total dividends for FY12 to 50 sen per share, which is 6.4% higher than our initial forecast. This will represents a dividend payout of 70%, with a yield of 2.7% for 2012.
with the 15 sen interim dividend it paid in September 2012, will bring its total dividends for FY12 to 50 sen per share, which is 6.4% higher than our initial forecast. This will represents a dividend payout of 70%, with a yield of 2.7% for 2012.
Upgrade to NEUTRAL. Following an internal coverage revamp, we have revisited our financial model and revised some assumptions. This leads to a small 1.3% cut in our FY13 forecast earnings and a 1.0% uptick in our FY14 estimate. While 2013 may be a more favorable year for PTG due to the potential contribution from its Regasification Terminal business in Malacca, we believe that the stock is currently trading at lofty valuations, which may cap its upside. That said, we are upgrading the stock from SELL to NEUTRAL, at RM18.53 FV, based on sum-of-parts valuation (please see Figure 1).
Source: OSK
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