OIL & GAS 
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Research by Kenanga
Overweight

“1QCY24 Report Card: Sustained Earnings Momentum”

We maintain our OVERWEIGHT call on the sector. The sector’s earnings delivery (against our forecasts) in 1QFY24 was comparable sequentially, with most companies beating or meeting our expectations, particularly those in the offshore support vessel (OSV) and midstream segments. We expect the earnings strength for these subsectors to sustain into coming quarters and Brent crude prices to average at USD84/bbl in 2024, a level that is conducive to upstream spending by oil majors. The upstream services sub-segment will remain the star in 2024 as Petronas ramps up in spending domestically. Our sector top picks are DIALOG (OP; TP: RM3.18), YINSON (OP; TP: RM3.47), and VELESTO (OP; TP: RM0.34).

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

“1QCY24 Report Card: Sustained Earnings Momentum”

We maintain our OVERWEIGHT call on the sector. The sector’s earnings delivery (against our forecasts) in 1QFY24 was comparable sequentially, with most companies beating or meeting our expectations, particularly those in the offshore support vessel (OSV) and midstream segments. We expect the earnings strength for these subsectors to sustain into coming quarters and Brent crude prices to average at USD84/bbl in 2024, a level that is conducive to upstream spending by oil majors. The upstream services sub-segment will remain the star in 2024 as Petronas ramps up in spending domestically. Our sector top picks are DIALOG (OP; TP: RM3.18), YINSON (OP; TP: RM3.47), and VELESTO (OP; TP: RM0.34).

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