Petronas Gas: Downgrade to Hold - No Surprises; Near-term Priced In

• Downgrade to HOLD. Petronas Gas' 1H12 core net profit was in line, accounting for 48% of our full-year forecast.
• Nonetheless, most of the medium-term positives (i.e. Melaka regasification project and Kimanis power plant) have been priced in following a 16% surge in its share price over the last three months.
• We believe Gas Malaysia is a better defensive O&G play, on valuations and dividend yield (4-5%) grounds.

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Source: Maybank Research - 16 August 2012