OIL & GAS
[%wlIL%] [%lzUC%] [%ChgY%] [%iTKA%] [%raff%] 
Research by Kenanga
Overweight

“4QCY23 Report Card: Upstream Well Oiled”

We upgrade our sector call to OVERWEIGHT from NEUTRAL. There was a significant improvement in the upstream services segment’s earnings delivery (against our expectations) in 4QCY23 sequentially, while that of the petrochemical and shipping segments only matches our expectations. With Brent crude prices expected to remain stable at USD84/bbl, we anticipate an increase in Petronas's upstream spending in 2024, aligning more closely with its RM60b annual capex goal. The upstream services segment appears to be entering the initial stages of a potential upcycle which will usher in an influx of job opportunities in 2024 and potentially more favourable contract terms as the supply of both upstream services and vessels tightens. 

Analyst(s):
Lim Sin Kiat, CFA
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OIL & GAS
$KLSE-DIALOG $KLSE-YINSON $KLSE-UZMA $KLSE-VELESTO $KLSE-WASEONG 
Research by Kenanga
Overweight

“4QCY23 Report Card: Upstream Well Oiled”

We upgrade our sector call to OVERWEIGHT from NEUTRAL. There was a significant improvement in the upstream services segment’s earnings delivery (against our expectations) in 4QCY23 sequentially, while that of the petrochemical and shipping segments only matches our expectations. With Brent crude prices expected to remain stable at USD84/bbl, we anticipate an increase in Petronas's upstream spending in 2024, aligning more closely with its RM60b annual capex goal. The upstream services segment appears to be entering the initial stages of a potential upcycle which will usher in an influx of job opportunities in 2024 and potentially more favourable contract terms as the supply of both upstream services and vessels tightens. 

Analyst(s):
Lim Sin Kiat, CFA
limsk@kenanga.com.my

$WASEONG / 5142 (WAH SEONG CORPORATION BERHAD)