KUALA LUMPUR, Dec 7 — Maybank Investment Bank (Maybank IB) believes that the implementation of Cukai Makmur in the financial year 2022 (FY22) would bring forward Petronas Gas Bhd’s earnings step-down by a year.
Hence, it has lowered FY22 earnings forecast by 11 per cent for Petronas Gas to reflect the impact of the one-off tax.
The impact is relatively pronounced as Petronas Gas’s processing, transportation and utilities segments are housed under a single entity.
Meanwhile, based on the stipulated schedule, the likely transportation tariff decline would be the most severe in the next regulatory period beginning 2023.
“We currently assume a 20 per cent tariff decline in FY23. This is our view, (it) has likely been a pertinent overhang for the stock,” it said in a note.
Petronas Gas’s transportation segment, recall the RAB (regulated asset base) used for tariff determination is based on a sliding weighted average of depreciated replacement value and historical cost.
“Management has been on the lookout for new projects to help offset the impending decline.
“The Southern debottlenecking exercise is underway, with scheduled completion in mid-2022,” it said, adding that Petronas Gas is also soliciting interest for a third liquefied natural gas (LNG) storage tank in Pengerang (earliest possible commissioning in 2025).
Other ongoing growth pursuits include integrated utilities solutions at industrial parks, electricity generation (IPPs) and LNG-to-Power.
Maybank IB is maintaining a hold call on Petronas Gas with unchanged target price of RM17.20. — Bernama