[%MTuI%] 
Research by HLIB
Buy – TP of MYR 3.36

“Acquires 37.5% stake in Block B MLJ field ” 

Hibiscus announced that it had entered into a conditional share purchase agreement for the purchase of TotalEnergies EP for a cash consideration of USD259.4m (RM1217.2m), funded by internally generated funds and debt facilities. The acquiree owns 37.5% operated interest in Block B Maharajalela Jamalulalam field (MLJ) field. Hibiscus daily production is expected to grow to 29kboed after adding c.7.9kboed of daily production (84% gas) from the MLJ field. The implied acquisition price-to-2P reserves for the deal is USD10.1/boe. We reckon the valuation is on the high side, but it is justified by its low opex profile at a mere USD5-6/boe. The acquisition may add 6.4%/37.8% to our FY25/26f forecasts. We arrive at an incremental NPV of USD263m but our TP may decline by 12 sen to RM3.24 (from RM3.36) as it is offset by the spike in net debt in FY25f. No change to our forecasts pending shareholders’ approval. Maintain BUY on Hibiscus with unchanged TP of RM3.36.

Analyst(s):
Brian Chin
[%OxYe%]

$KLSE-HIBISCS 
Research by HLIB
Buy – TP of MYR 3.36

“Acquires 37.5% stake in Block B MLJ field ” 

Hibiscus announced that it had entered into a conditional share purchase agreement for the purchase of TotalEnergies EP for a cash consideration of USD259.4m (RM1217.2m), funded by internally generated funds and debt facilities. The acquiree owns 37.5% operated interest in Block B Maharajalela Jamalulalam field (MLJ) field. Hibiscus daily production is expected to grow to 29kboed after adding c.7.9kboed of daily production (84% gas) from the MLJ field. The implied acquisition price-to-2P reserves for the deal is USD10.1/boe. We reckon the valuation is on the high side, but it is justified by its low opex profile at a mere USD5-6/boe. The acquisition may add 6.4%/37.8% to our FY25/26f forecasts. We arrive at an incremental NPV of USD263m but our TP may decline by 12 sen to RM3.24 (from RM3.36) as it is offset by the spike in net debt in FY25f. No change to our forecasts pending shareholders’ approval. Maintain BUY on Hibiscus with unchanged TP of RM3.36.

Analyst(s):
Brian Chin
brianchy@hlib.hongleong.com.my

$HIBISCS / 5199 (HIBISCUS PETROLEUM BERHAD)