KNM – Fair value unchanged at RM0.68

KNM – Fair value unchanged at RM0.68                                                                Underperform

-          Despite a lackluster YTD performance from the oil & gas stocks compared to Brent crude which rose by 14%, we remain positive on the sector’s long-term outlook due to sustained oil and gas spending. We thus expect earnings to continue playing catch up with valuations.

-          We are not changing our benchmark valuation, currently at 15x CY12 earnings with either a premium or a discount accorded to each oil & gas stock under our coverage. Our oil & gas stock calls are unchanged other than Perdana Petroleum which has been upgraded to Market Perform due to a pull back in its share price.

Source: RHB Research - 3 April 2012