7th August, 2012
KUALA LUMPUR: OSK Research views UMW Holdings Bhd will be a major upstream oil and gas (O&G) player, hand-in-hand with Petronas as a key partner in the development of marginal oilfields, going forward.
In late June, UMW signed a memorandum of understanding with Petronas to establish a training academy that would help address shortage of skilled Malaysian personnel in the O&G and drilling industries.
Lack of domestic players in the O&G industry and drilling fields bodes well for domestic players such as UMW, it said in a research note yesterday.
OSK Research sees UMW as a major beneficiary in the development of marginal oilfields where Jack-up drilling rigs specs are best suitable for.
The research house said that of the three UMW’s rigs, two have been chartered out to Petronas.
“Our latest checks show Petronas currently operates 14 rigs (13 in Southeast Asia and one in the Caspian Sea), of which two are owned by UMW (Naga 1 and Naga 3) and one belongs to SapuraKencana Petroleum Bhd,” it said.
On the group’s auto division, OSK remained upbeat as prospects continue to be promising.
“There are indications that vehicle sales target will see a 3.2 per cent upward revision from 93,000 units to 96,000 units, though we think this is still a conservative target as we expect sales to touch 101,056 units for financial year 2012,” OSK said.
In addition to its growing market share in new car sales in recent years, UMW saw higher revenue from after sales and used car business.
Recent numbers from the Malaysian Automotive Association showed sales of Toyota Vios and Camry models have remained encouraging despite Honda’s comeback, OSK said.
Over the medium-to-long-term, model launches would continue to be driven by facelifts and a big boost to volume could potentially be Toyota’s upcoming eco car, it said.
OSK maintained high conviction “buy” for the group.