Congrats to those who has HIBISCUS! @mengteck @FIRLGuys @wsk20 @GoldieLoh @zhengyou0705 @Jasonsum

For those who "miss" on $HIBISCS / 5199 (HIBISCUS PETROLEUM BERHAD) and have exposure in trading Singapore stocks / SGX, they can consider REX International $SGX-5WH - one of my top picks in 2022

Just like HIBISCUS, Rex Intl $REX International Holdings (sgx) is a big beneficiary of high oil price. Their 2H 2021 numbers will blow the lights out. The company could be trading at 2-4x PE.

** Thesis **

Oil & Gas stocks had been underperforming for years. A dollar of earnings earned by the names in the sector are valued very lowly by the investment community these days, due to the apparent “old economy, ESG narrative”… but in an inflationary environment, what better way than parking some money to stocks at dirt cheap valuation and beaten down? Especially now that oil price keeps going up?

Rex intl story is very similar to $HIBISCS. They bought an asset from repsol in 2021 as well. And currently, their absolute price return % performance lag that of oil price AND hibiscus in the YTD / past 3 months.

- Rex will report results around end Feb; I expect 2H21 results to be a wake-up call to the investment community as this include the financials of acquired Norwegian Brage field and its cash flow from 01/01/2021. I repeat, not from the date of purchase, but FROM BEGINNING OF THE YEAR as part of the deal. When the deal was announced, oil prices were hovering around 60 USD, today they are over 90 USD!

- Going forward, Rex will have both Oman Yumna field asset (able to contribute 10k bpd) on top of the Norwegian Brage asset (able to contribute 5k bpd). They also recently won some concession in Malaysia and looking for some contribution in near future.

- On financials and valuation, as I’m no oil n gas expert, it’s hard to quantify as there’s no insight into how Brage field performed during 2021, but looking at 1H numbers from Rex, oil prices, info from production of Oman asset, I calculated that Rex could still only be trading at anywhere between 2-4x FY21 PAT. Beyond that, Looking into FY22, and taking spot oil prices, it is not hard to see FY22 will be a good year for the company too.

- With the huge profit and cashflow that will be attained, the company should be paying a good dividend as well as potentially buying back its own shares. If all goes smoothly, there may be potential of up to double digit dividend yield to be paid out.

Something to ponder!

Tagging my foreign stocks kaki @Jay888 @zhexiangxd @facademy