$HIBISCS / 5199 (HIBISCUS PETROLEUM BERHAD)
Research by Public
Outperform - TP RM3.20

"Rapid Expansion"

Hibiscus Petroleum (Hibiscus) recorded a core net profit of RM149.0m, higher by 31.3% YoY, mainly due to higher oil offtake volume by +41.7% and favourable realised oil price. However, the result came in flat on a QoQ basis as planned maintenance works and shut downs offset its revenue growth. Full year FY24 numbers exceeds our and consensus numbers at 108.1% and 109.9% respectively. The deviation is largely due to elevated realised oil price at an average of USD92.10 per barrel throughout FY24. Despite exceeding estimates, we make no changes to our FY25/26 forecast as we assume the realised oil price will be moderate in the forecast period. We maintain our Outperform call and unchanged TP RM3.20 based on sum-of-parts valuation. We believe the share price is deeply undervalued, only trading at 3.6x earnings multiple with net cash of about 29.6 sen per share. In the last 3 months, Hibiscus has expanded through three projects: i) Acquistion of TotalEnergies EP Brunei ii) The maiden PSC direct award PKNB Cluster PSC and iii) PM327 farm-in agreement. We also note its PM3 CAA extension negotiation has been finalised, pending approval from both the Malaysian and Vietnamese governments.

Analyst:
Khairul Fahmi, CFA
khairul.fahmi@publicinvestbank.com.my