Universiti Tenaga Nasional

College of Business Management & Accounting

Investment ( FICB323 )

Group Assignment:
PETRONAS GAS BERHAD (6033)
Submitted to :
Mr. Zulkifli Bin Abdullah

Prepared By:
NAME : ID :
1. Alexander A/L Arulsamy BF0101106
2.Minothan A/L Jayabalan BF0102050
3.Darshieni A/P Subramaniam BF0102054

4.Sri Suwarna A/P Letchumanan BF0102055

5.Suganthi A/P Ravindran BF0102081

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1.0 Overview of Company

The company chose is; PETRONAS GAS BERHAD / 6033(stock code).

PETR0 Gas Berhad (PGB) was incorporated in 1983 and was listed on the main
market of Bursa Malaysia Securities Berhad on 4 September 1995.

The Company was initially the wholly-owned subsidiary of PETRONAS, the

Malaysia’s national oil corporation, which upon listing owns 60.63% of its shares while the
remaining 39.37% is held by financial institutions and retail shareholders.

With the vision “A LEADING GAS INFRASTRUCTURE AND UTILITIES

COMPANY”, today, it is one of the largest companies on the local bourse, in terms of market
capitalisation. The Company is also Malaysia’s leading gas infrastructure and utilities
company with core businesses in Gas Processing and Utilities (GPU) and Gas Transmission
and Regasification (GTR).

The Company processes PETRONAS’ natural gas piped from offshore fields,
transports the processed gas via Peninsular Gas Utilisation (PGU) pipeline network to
PETRONAS’ customers in Malaysia and Singapore. In addition, the Company also supplies
steam and industrial gases for its customers at Kertih Integrated Petrochemical Complex in
Terengganu and Gebeng Industrial Area in Pahang.

The Company has a staff strength of 2,187 employees nationwide. The majority of the
staff are based at its plant operations located in Kertih and Santong, Terengganu and in
Gebeng, Pahang.

Petronas Gas Berhad operates from its headquarter at the PETRONAS Twin Towers
in Kuala Lumpur as well as nine regional offices in Peninsular Malaysia and two in East
Malaysia.

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 In 2013, we further broadened its business portfolio with the commissioning of the
liquefied natural gas (LNG) Regasification Terminal in Sungai Udang, Melaka, the
Malaysia’s first regasification facility.

Over the years, PGB have expanded the business and this includes venturing into
power generation in Sabah in 2011, through a 60% joint venture company, Kimanis Power
Sdn Bhd, which commenced its full commercial operations end of 2014.

Petronas Gas Berhad are also constructing two new plants, second LNG
Regasification Terminal and Air Separation Unit (ASU) in Pengerang, Johor which are
expected to complete by end 2017 and end 2018 respectively.

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2.0 Stock Valuation

A} REVENUE & REVENUE GROWTH (%)

YEARS 2012 2013 2014 2015 2016 2017 2018

REVENUE(RM) 3576771 3892139 4391716 4455955 4561280 4851823 5131188

REVENUE GROWTH ~ 0.08817 0.12836 0.01463 0.02364 0.0637 0.05758

REVENUE ~ 8.82% 12.84% 1.46% 2.36% 6.37% 5.76%

GROWTH(%)

Revenue Growth = Y1-Y0/Y0

2013 = 0.08817 / 8.82%

3892139- 3576771
3576771
2014 = 0.12836 / 12.84%
4391716-3892139
3892139
2015 = 0.01463 / 1.46%
4455955-4391716
4391716
2016 = 0.02364 / 2.36%
4561280-4455955
4455955
2017
0.088+0.128+0.015+0.024
4
= 0.0637 / 6.37%
= 4561280 x ( 1 + 0.0637) = 4851823
2018
0.128+0.015+0.024+0.064
4
= 0.05758 / 5.76%
4851823 x (1 + 0.056) = 5131188

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 Revenue
6000000

5000000 5131188
4851823
4561280
4391716 4455955
4000000 3892139
3576771
3000000
Revenue

2000000

1000000

0
2012 2013 2014 2015 2016 2017F 2018F

Graph 1

Revenue Growth
14.00%
12.84%
12.00%

10.00%
8.82%
8.00%

6.37% Revenue Growth

6.00% 5.76%

4.00%

2.00% 2.36%
1.46%
0.00%
2013 2014 2015 2016 2017F 2018F

Graph 2

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B} EARNING, EARNING GROWTH & EARNING PER-SHARE
(EPS)

YEARS 2012 2013 2014 2015 2016 2017 2018

EARNING(RM) 1405205 2078888 1843186 1987452 1739052 1877883 1840203

EARNING GROWTH ~ 0.47942 -0.1134 0.07827 -0.125 0.07983 -0.0201
EARNING GROWTH(%) ~ 47.94% -11.34% 7.83% -12.50% 7.98% -2.01%
EARNNING PER-
SHARE(EPS) 0.71015 1.05062 0.9315 1.00441 0.87887 0.94903 0.92999

EPS = Earning/No.Shares Outstanding

2012 1405205
1978732
= 0.71015
2013 2078888
1978732
= 1.05062
2014 1843186
1978732
= 0.9315
2015 1987452
1978732
= 1.00441
2016 1739052
1978732
= 0.87887

2017 1.05062+0.9315+1.00441+0.87887
4
= 0.94903
2018 0.9315+1.00441+0.87887+0.94903
4
= 0.92999

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 Earnings
2500000

2078888
2000000 1987452
1843186 1877883 1840203
1739052
1500000
1405205
Earnings
1000000

500000

0
2012 2013 2014 2015 2016 2017F 2018F

Graph 3

EPS
1.2

1.05062
1 1.00441
0.9315 0.94903 0.92999
0.87887
0.8
0.71015
0.6
EPS

0.4

0.2

0
2012 2013 2014 2015 2016 2017F 2018F

Graph 4

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C} DIVIDEND, DIVIDEND GROWTH & DIVIDEND PER-SHARE (DPS)

YEARS 2012 2013 2014 2015 2016 2017 2018

DIVIDEND(RM) 791493 989366 1582988 1147664 1187238 1368138 1543210

DIVIDEND GROWTH ~ 0.25 0.6 -0.275 0.03448 0.15237 0.12796

DIVIDEND GROWTH(%) ~ 25.00% 60.00% -27.50% 3.45% 15.24% 12.80%

DIVIDEND PER- 0.4 0.5 0.8 0.58 0.6 0.69142 0.7799

SHARE(DPS)

DPS = Dividend/ No.Shares Outstanding

2012 791493
1978732
=0.4
2013 989366
1978732
=0.5
2014 1582988
1978732
=0.8
2015 1147664
1978732
=0.58
2016 1187238
1978732
=0.6
2017 1368138
1978732

= 0.69142
2018 1543210
1978732
= 0.7799

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 Dividend
1800000

1600000 1582988 1543210

1400000 1368138
1200000
1147664 1187238
1000000 989366
800000 791493 Dividend

600000

400000

200000

0
2012 2013 2014 2015 2016 2017F 2018F

Graph 5

DPS
0.9

0.8 0.8 0.7799

0.7 0.69142
0.6 0.58 0.6

0.5 0.5

0.4 0.4 DPS

0.3

0.2

0.1

0
2012 2013 2014 2015 2016 2017F 2018F

Graph 6

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D} PRICE-EARNING RATIO

YEARS 2012 2013 2014 2015 2016 2017 2018

P/E RATIO 20.67 20.67 20.67 20.67 20.67 20.67 20.67

E} TARGETED FUTURE STOCK PRICE

YEARS 2012 2013 2014 2015 2016 2017 2018

~ ~ ~ ~ ~ 19.6165 19.2229

F} CAPITAL ASSETS PRICING MODAL

(CAPM)

CAPM Ra= Rf + Ba(Rm-Rf)

RF 0.04
RM 0.069
RA 0.07132

f.1} Dividend Valuation

Model (DVM) 2017 2018
TR= D1/(k-g) -8.5307 -13.769

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3.0 Fundamental Information

I} Current Market Price = RM19.00 ; [closed 4.50PM MYT/ 12-1-2018]

II} Current Market Capitalization = RM37.61 Billion

III} Line Chart compared with FBM KLCI for 1Y, 3Y and 5Y stock market price.(next
page)

IV} Top 15 Major Shareholders of Petronas Gas Berhad:

No. NAME No. of Total % of Total

Shareholdings Shareholdings

1. CIMB GROUP NOMINEES SDNBHD 1,199,768,000 60.63

2. CITIGROUP NOMINEES SDN BHD 190,205,132 9.61

3. KUMPULAN WANG PERSARAAN 103,638,500 5.24

4. AMANAHRAYA TRUSTEES BERHAD 62,577,300 3.16

5. AMANAHRAYA TRUSTEES BERHAD 29,958,300 1.51

6. CARTABAN NOMINEES SDN BHD 22,874,960 1.16

7. AMANAHRAYA TRUSTEES BERHAD 20,683,400 1.05

8. AMANAHRAYA TRUSTEES BERHAD 16,316,300 0.82

9. AMANAHRAYA TRUSTEES BERHAD 15,358,100 0.78

10. MALAYSIAN NOMINEES SDN BHD 13,515,000 0.68

11. HSBC NOMINEES SDN BHD 12,659,496 0.64

12. AMANAHRAYA TRUSTEES BERHAD 10,944,000 0.55

13. HSBC NOMINEES SDN BHD 10,757,250 0.54

14. AMSEC NOMINEES SDN BHD 9,461,700 0.48

15. CARTABAN NOMINEES SDN BHD 8,687,000 0.44

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III.1) PETRONAS GAS BERHAD-FBM KLCI 1YEAR STOCK PRICE

Petronas Gas Berhad 2016

23.5
23
22.5
22
21.5
21
20.5
20
19.5
1 2 3 4
Q Q Q Q

Petronas Gas Berhad 2016

Graph 7

FBM KLCI 2016

1,750.00

1,700.00

1,650.00

1,600.00

1,550.00

1,500.00

FBM KLCI 2016

Graph 8

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 Graph 7 above shows the value of daily stock market price for one year from January
2016 until December 2016. Graph 8 shows the value of FBM KLCI for one year, from
January 2016 until December 2016. For the first quarter of the year, the both graphs shows
the price decreases and then rise towards a positive trend. This might be contributed by the
announcements of PGB for the first quarter, such as its effort on optimising the cost, new
group of ceo for its international lubricants marketing arm and more.

Next, the trend of FBM KLCI and Petronas for the second quarter of the year, shows a
fall, yet because of oil price volatility and economical factors. Then the price rises for the
third quarter and sustains by showing some slight ups and downs by number.

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III.2) PETRONAS GAS BERHAD-FBM KLCI 3YEAR STOCK PRICE

Petronas Gas Berhad 2015-2017

26
24
22
20
18
16
14
12
10
3 1 3 1 3
1 Q Q Q Q Q
Q
1 1 1 1 1
1 5 6 6 7 7
5

Graph 9

FBM KLCI 2015-2017

1,900.00
1,850.00
1,800.00
1,750.00
1,700.00
1,650.00
1,600.00
1,550.00
1,500.00
1,450.00
1,400.00
3 1 3 1 3 1
Q Q Q Q Q Q

1 1 1 1 1 1
7 7 6 6 5 5

FBM KLCI 2015-2017

Graph 10

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 Graph 9 and 10 above shows the value of stock market price and FBM KLCI for three
years respectively. Both the values stock market price and FBM KLCI goes up and down for
each month of the years. For PGB, the stock market price had increased from January 2015
until 1st quarter of 2016. While the value of FBM KLCI had increased too fro January 2015
until December 2015 for the first year. Then the stock price starts to reduce slightly all month
until the year 2017. While for FBM index, the price had dropped in 2016 and rise up again on
2017. This is affected by petronas announcements, such as signing mou with NIOC for future
collaboration, successful production of LNG from first floating LNG facility.

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III.3) PETRONAS GAS BERHAD-FBM KLCI 5YEAR STOCK PRICE

Petronas Gas Berhad 2013-2017

26

24

22

20

18

16

14

12

10
2/1/2013 2/1/2014 2/1/2015 2/1/2016 2/1/2017

Petronas Gas Berhad 2013-2017

Graph 11

FBM KLCI 2013-2017

2,000.00

1,900.00

1,800.00

1,700.00

1,600.00 FBM KLCI 2013-2017

1,500.00

1,400.00

Graph 12

Above shows graph 11 and 12, for 5years of time. The graph is from 2013 until 2017.
PGB and FBM have shown a volatile share price along the 5years period.The worst low price
recorded for PGB is on 2017,while for FBM is 2016.

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4.0 Conclusion

In summary, Petronas Gas Berhad as one of the constituent companies of the FBMKLCI, has
a current market capitalization of RM37.61 Billion. With a value of RM19.00 per-share,
closed on 12 January 2017, PGB has 1978732 shares in outstanding.

Revenue of PGB has showed a positive increasements along the past 5-years, with a
number of RM3576771 at 2012 and rose to RM4561280 at 2016 relatively, with a growth of
27%. While, the revenue is also expected to keep on grow on the coming years.

Next, earnings of PGB has gone through some ups and downs along the past five
years time and ending last at a value of RM1739052. This number is expected to rise slightly
on the upcoming year. As for EPS, it can be concluded almost the same, as on 2016, the
earning for per-share is 0.87887 and expected to increase in time as well.

Further, cash dividend paid to shareholders had increased subsequently along the
years and closed at a price of RM1187238 in the year 2016. In addition, the price dividend
paid for per-share was RM0.06 in 2016. While, dividend payout is expected to rise in
upcoming years and increase dividend per-share as well.

Hence, the targeted stock price of Petronas Gas Berhad is expected RM19.6165 for
2017 and RM19.2229 for 2018.

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5.0 Recommendation

Current Market Price < Target Market Price(Intrinsic Value) =Undervalued(BUY)

Current Market Price = Target Market Price(Intrinsic Value) =Fairly valued(HOLD)

Current Market Price > Target Market Price(Intrinsic Value) =Overvalued(SELL)

2017

Revenue : RM4851823(expected to grow 6.37%)

EPS : RM 0.94903 per-share

DPS : RM0.69142 per-share

Rate of Return : 7.13%

Current Market Price : RM19.00

Target Market Price : RM19.6165

_ Since the current market price is less than target market price, it is recommended to BUY
the stock.

2018

Revenue : RM 5131188

EPS : RM 0.92999

DPS : RM 0.7799

Rate of Return : 7.13%

Current Market Price : RM19.00

Target Market Price :RM19.2229

_Since the current market price is less than target market price, it is recommended to BUY
the stock.

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6.0 References

1. Thomson Reuters

2. Yahoo Finance Website

3. Bloomberg Website

4. Wikipedia Website

5. Bursa Malaysia Website

6. Petronas.com.my

7. Investopia.com

8. Investment Slides

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