KENANGA RESEARCH POSITIVE ON PETGAS'S COMPRESSOR STATION DEVELOPMENT
KUALA LUMPUR, March 18 (Bernama) -- Kenanga Research is positive on Petronas Gas Bhd's (PetGas) compressor station project in Jeram, Selangor as the development “expands its regulated asset base (RAB) for ‘Regulatory Period 3’ (RP3) from 2026-2028 and enhance its absolute earnings.”
The research firm said PetGas has already committed to capital expenditure (capex) in the financial year 2024 (FY2024) of more than RM1.1 billion.
"We continue to like PetGas for its earnings stability of more than 90 per cent which is safeguarded by the incentive-based regulation (IBR) framework and its capex plans under the RP2 that will improve its absolute earnings, anchoring a decent dividend yield of 4.0 per cent.
"However, its valuations are already rich at the current levels. Hence, we maintained our ‘market perform’ call but raised the target price slightly to RM17.87 from RM17.80 previously," it said in a note today.
PetGas is investing in a RM650 million compressor station comprising two units of gas compressors in Jeram, with targeted completion in 2026.
The gas compressor station is to improve Peninsular Gas Utilities (PGU) III capacity in the northern region and is anticipated to meet future gas demand increases from 2026 onward.
At 10.30 am, PetGas fell four sen to RM17.76 with 56,600 shares traded.
-- BERNAMA
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