KUALA LUMPUR, May 19 — Kenanga Research has maintained an “outperform” rating on Petronas Dagangan Bhd (PetDag) with a higher price target of RM26.70 per share, following its stellar financial performance for the first quarter 2017 (1Q17).
PetDag recorded a pre-tax profit of RM335.6 million for the three months ended March 31, 2017 against RM295.6 million recorded in the same quarter last year, while revenue rose to RM6.69 billion from RM4.91 billion previously.
In a note today, the research house said the group presented yet another solid set of results for 1Q17, as business volume remained healthy, albeit, a six per cent decline from the preceding quarter.
Another solid 2Q17 is expected, given the probability of high traffic volume for the school holidays and Hari Raya festivity break towards the end of the quarter, it said.
The research house said all these were catalysts to PetDag’s share price in the near-term while long-term earnings sustainability was supported by volume growth and operational efficiency.
“Our new price target is now RM26.70 per share from RM26.63 per share previously. We continue to give the stock an ‘outperform’ rating given its resilient business volume. The weekly pump price review should help mitigate inventory cost shock to ensure better profit earnings,” it added.
As at 11.54am, PetDag’s share price rose 84 sen to RM24.92 with 309,300 shares changing hands. — Bernama