KL Trader Investment Research Articles
Gas Malaysia - Stable Cash with Net Cash Position
Gas Malaysia
Stable Cash with Net Cash Position
- Gas Malaysia (GMB) is one of the only two natural gas (NG) supplier in Peninsular Malaysia (the other is Petronas Gas).
- GMB will cover new market with initial demand of < 5mmscfd (previously 2mmscfd), giving more upside to GMB market share. GMB is effectively monopolizing this market segment with no direct competitor.
- GMB Margin is under government’s discretion.
- The demand for NG is likely to stay robust given its relative advantages and government’ initiatives to meet low emission target by 2020.
- GMB had signed agreement with PGB to increase NG supply to 492mmscfd by 2015 (currently 382mmscfd) on a step up basis, in order to meet the increasing demand.
- Stable earnings and cash flow, ensuring stable dividend payout. GMB will payout at least 75% of earnings, which translate into 4-5% net dividend yield.
- We believe the fair value for GMB is RM2.55 based on 22x FY13 P/E and 3.4x FY13 P/B.
Source: Hong Leong Investment Bank Research - 21 May 2012
More articles on KL Trader Investment Research Articles
Discussions
2 people like this. Showing 6 of 6 comments
RM1.5 means must have pressure from public, then public to Gov. I still believe that they still can adjust to 2.0 before launch. GMB, PLEASE.
2012-05-21 17:11
How can the dividend yield be 4-5% when PE is 22x and the payout ratio is 75%. Based on this PE and payout ratio the dividend yield should be 3.4%.
2012-05-22 22:33
I have a tendency to support your calculation. we have to scrutinize the finer points lest we get caught like the recent IPO skp. It should be cheaper like 1.90 - 2.00 perhaps can consider very bad sentiments globally.
2012-05-22 22:46
I think I got his calculation he is using RM2.55 for 22x PE and this gives the value of about 4% based on the IPO price of RM 2.20.
2012-05-22 23:07
Post a Comment
Featured Posts
Latest Videos
Apps
Top Articles
1
Axcapital's investment blog
KAB - Executing its way to a record quarter. Could more Petronas contracts be coming?
3
4
Koon Yew Yin's Blog
5
BFM Podcast
6
BFM Podcast
7
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
MQ Trading Signals
Stock
Time
Signal
Duration
Stock
Time
Signal
Duration
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Namoyaki Takarajima
Everything is fine except the last point sound not convincing, GMB should adjust the price/unit, the fair value for GMB wish to be RM2.0; fair value.
2012-05-21 16:48