PETGAS Analysis File – https://lcchong.files.wordpress.com/2017/10/petgas-fy17-q21.xlsx
In the foreseeable future, I think PETGAS is expected to remain stable. You won’t find any WOW factor in short term though.
However, with existing Gas Processing Agreement, Gas Transportation Agreements and Regasification Service Agreement signed with PETRONAS, I believe that PETGAS income is sustainable. Besides, PETGAS will allocate around RM4.5 billion capex to cater for the growth projects, such as the LNG Regasification Terminal (RGT) and the Air Separation Unit (ASU) project, both of which are located in Pengerang.
The RGT project is now at 25% progress on ground and the first storage tank should be commissioned before the end of 2017 while the second tank, which will complete the whole project, will be commissioned by the first quarter of 2018. Its Pengerang Gas Pipeline Project is also on track and expected to be completed this year, which will enable the initial supply of gas from the existing Peninsular Gas Utilisation (PGU) pipeline network to Pengerang and vice versa.
Thus, with the above catalysts, I believe PETGAS will continue to grow in long term.
In my opinion, its fair value is range 19.5-22.31 (base scenario), and 17.98-20.68 (bad scenario). At 18.50, PETGAS is undervalued. Because my average price of PETGAS was 8.9, I have accumulated some PETGAS shares recently.