KUALA LUMPUR, Feb 17 — Petronas Gas Bhd’s (PGB) share price on Bursa Malaysia fell by 0.91 per cent following its announcement of a lower net profit for the financial year ended Dec 31, 2022 (FY22).

At 10.40am, the gas infrastructure and utilities group’s shares declined by 16 sen to RM17.34, with 19,100 shares traded.

Yesterday, PGB reported that its net profit for FY22 slipped to RM1.65 billion from RM1.99 billion recorded in FY21.

Nonetheless, most research firms are optimistic about PGB, given the group’s positive prospects and the expectation of a more stable gas market going forward.

MIDF Research has upgraded its call on PGB’s shares to ‘buy’ and raised the target price (TP) to RM18.43 from RM17.27 previously as the gas market is expected to gradually minimise its volatility amid the recovery in China’s economy after the country eased its strict Covid-19 restrictions.

However, it noted that inflationary pressures continue to impact foreign exchange rates, the cost of raw materials and the price of fuel gas in the Asian region.

“Nevertheless, we believe that PGB will continue to stay resilient, given its long-term contracts and prospected bids, sustained and positive revenue growth, and near 100 per cent plant utilisation across all of its business segments,” the research firm said in a note.

Kenanga Investment is also positive on PGB and kept its earnings growth projection for the company at 10 per cent in FY23 before normalising to one per cent in FY24, noting that as gas prices are projected to soften in the near term, a recovery is expected in FY23.

Meanwhile, it said PGB’s medium-term earnings growth will be driven by a new RM541 million gas pipeline project to cater to an independent power producer in Pulau Indah (commercial operations date (COD): mid-FY23, as well as a RM460 million gas compressor station project in Kluang (COD: first quarter of FY24).

“Over the longer term, a 52 megawatt power plant in Sipitang, Sabah (expected commissioning in 2026) will support earnings growth,” it said in a separate note.

As such, the research firm has maintained its ‘market perform’ call on PGB with an unchanged TP of RM17.13 per share. — Bernama