20150924-Maybank_KERPL-Regional_Oil___Gas_11页_797kb

Regional Oil & Gas Summary

Core Content

• Oil Price Movement: On 23 September 2015, both Brent and WTI crude oil prices fell significantly. Brent dropped by 2.7% to USD47.75/b, while WTI fell by 4.1% to USD44.48/b. The decline was attributed to a large gasoline build in the U.S. that offset the positive impact of lower crude inventories. The U.S. crude futures also fell due to issues with Colonial Pipeline.

• Malaysia's Storage Lease: The second phase of the Tanjung Bin storage units in Malaysia was fully leased for fuel oil, with Petronas and Koch Supply and Trading equally sharing the tank space.

• Indonesia's Gasoline Imports: Indonesia's state-owned Pertamina is expected to import around 10.14 million barrels of gasoline in October, a marginal decrease from September's 10.54 million barrels. This is likely due to reduced consumption following the Eid al-Adha holiday.

• Refining Margins in Shandong: Refining margins for Shengli crude in Shandong increased this week, driven by lower feedstock costs and higher product prices. The refining margin reached USD47/tonne, up from USD300/tonne in early September.

• Xinjiang's CBM Project: The first demonstrative coalbed methane (CBM) project in Xinjiang, China, is set to launch by the end of October, with an annual production capacity of 30 million cubic meters. The CBM will be used for motor vehicles and future civil and industrial needs.

Main Points

• Oil Market Volatility: The global oil market faced significant volatility due to the large build-up of gasoline supplies and pipeline issues, leading to a drop in both Brent and WTI prices.

• Storage Developments: Malaysia's storage expansion and leasing activities indicate increased capacity and potential for fuel oil storage, affecting regional oil dynamics.

• Refining Performance: Improved refining margins in Shandong suggest better performance for local refiners, possibly due to cost reductions and price increases for refined products.

• New CBM Project: The upcoming CBM project in Xinjiang marks a significant step in the development of natural gas resources in the region, aiming to support both transportation and industrial sectors.

Key Information

• Market Analysis: Maybank KE provides detailed market analysis and ratings for various oil and gas companies across Asia. Some companies are rated as Buy, Hold, or Sell based on their financial performance and market outlook.

• Company Ratings and Targets:

  • Yinson Holdings: Rated as Buy with a target price of MYR4.35.
  • SapuraKencana Petroleum: Rated as Hold with a lower target price of MYR2.00.
  • Petronas Chemicals: Rated as Hold due to weakening MYR against USD, but with potential for higher dividend yields.
  • China Oil & Gas: Upgraded to Overweight, with Sinopec and CNOOC rated as Buy, and PetroChina as Sell.

• Valuation Metrics: The table includes a variety of financial metrics such as price-to-earnings (PER), enterprise value to EBITDA (EV/EBITDA), return on equity (ROE), price-to-book value (P/BV), and dividend yield for different companies. These metrics help in evaluating the market value and performance of the companies.

• Regional Performance: The summary includes performance data for companies in China, India, Malaysia, Philippines, Japan, South Korea, and Thailand, highlighting variations in market trends and company-specific developments.

Analysts

• Howard Wong (HK/CHINA): Provides insights on the oil and gas sector in China and Hong Kong.
• Jigar Shah (INDIA): Offers analysis on the Indian oil and gas market.
• Pandu Anugrah (INDONESIA): Focuses on the Indonesian oil and gas industry.
• Liaw Thong Jung (MALAYSIA): Specializes in the Malaysian oil and gas sector.
• Michael Bengson (PHILIPPINES): Analyzes the oil and gas market in the Philippines.
• Yeah Chee Keong (SINGAPORE): Provides commentary on the Singapore oil and gas market.
• Sutthichai Kumworachai (THAILAND): Offers insights into Thailand's oil and gas industry.
• Le Nguyen Nhat Chuyen and Truong Quang Binh (VIETNAM): Focus on the Vietnamese oil and gas sector.

Summary Table

Company	Ticker	Maybank KE Rating	Price (USD)	Target Price (USD)	Market Cap (USD)	90D T/O (USD)	PER (2015E)	PER (2016E)	EV/EBITDA (2015E)	EV/EBITDA (2016E)	ROE % (2015E)	P/BV (2015E)	Yield % (2015E)
PetroChina - H	857 HK	Sell	5.58	4.80	227.3	101.6	24.5	42.9	6.4	7.1	2.9	0.7	1.8
Sinopec - H	386 HK	Buy	4.95	6.00	88.9	79.4	12.0	13.1	5.4	5.7	6.5	0.8	4.0
CNOOC LTD	883 HK	Buy	8.05	11.70	46.4	89.8	14.8	17.6	3.9	4.0	5.1	0.7	0.9
New Ocean Energy	342 HK	Buy	3.22	7.70	0.6	1.1	4.5	3.7	4.3	3.0	19.0	0.8	2.2
ONGC	ONGC IN	NR	236.6	NR	30.6	17.6	8.5	8.4	4.4	4.2	13.3	1.1	4.2
Reliance Industries	RIL IN	NR	850.4	NR	41.6	55.9	11.4	10.7	10.0	8.8	11.2	1.2	1.2
Cairn India	CAIR IN	Hold	148.0	198.00	4.2	6.4	4.1	7.1	1.3	2.1	11.7	0.4	6.1
BPCL	BPCL IN	NR	876.8	NR	9.6	25.2	20.2	11.1	10.7	7.3	15.2	3.0	1.7
HPCL	HPCL IN	NR	788.9	NR	4.0	25.0	20.2	9.4	10.1	7.3	8.8	1.8	2.1
Petron Corp	PCOR PM	Buy	6.88	11.25	1.4	0.5	15.7	9.3	7.9	6.9	4.4	0.7	0.7
Phoenix Petro	PNX PM	Buy	3.33	4.75	0.1	0.0	5.7	5.0	7.6	6.9	11.6	0.6	3.0
S-Oil	010950 KS	NR	61,900	NR	5.8	18.8	8.1	8.4	6.1	6.5	16.5	1.3	3.4
SK Innovation	096770 KS	NR	96,700	NR	7.5	36.1	6.9	7.6	5.9	6.4	8.3	0.6	2.9
GS Holdings	078930 KS	NR	45,700	NR	3.6	9.4	8.3	7.7	8.4	8.0	5.8	0.5	5.4
Formosa Petrochemical	6505 TT	NR	75.90	NR	21.9	7.2	19.5	20.2	12.3	12.6	14.4	2.7	3.6
PTT Global Chemical PCL	PTTGC TB	Buy	56.50	87.00	7.0	23.5	9.3	8.2	6.1	5.7	11.3	1.0	5.0
PTT PCL	PTT TB	Buy	252.0	395.00	19.9	59.6	8.7	7.8	6.1	5.8	10.9	1.0	4.5
Thai Oil PCL	TOP TB	Sell	52.50	65.00	3.0	8.9	8.7	9.1	6.3	6.1	13.3	1.2	4.8
Asian Refiners Average	-	-	-	-	-	-	13.0	11.9	-	9.0	7.6	1.0	2.5

Additional Notes

• Market Valuations: The tables provide comprehensive market valuations, including forward-looking estimates and multiples for companies not under Maybank Kim Eng's coverage, sourced from Bloomberg.
• Currency and Market Trends: The USD-CNY exchange rate and other financial metrics are included to give context to the market performance.
• Regional Overview: The summary includes data from various regions, providing a broad perspective on the Asia-Pacific oil and gas market.

This summary captures the essential elements of the oil and gas market analysis for the specified period, highlighting price movements, company performance, and regional developments.