HIBISCUS Petroleum Bhd is clearly riding nicely on the upcycle of oil prices. On Thursday it posted a second-quarter profit that beat analysts’ expectations. And as Maybank Investment Bank (Maybank IB) Research points out, the profits have yet to take into account earnings from the recently completed acquisition of assets from Spain’s Repsol.
PETALING JAYA: Hibiscus Petroleum Bhd’s completed acquisition of Fortuna International Petroleum Corp (FIPC) from Repsol is a positive development as this will transform the group’s earnings trajectory.
PETALING JAYA: Rising oil prices will help boost the prospects of Hibiscus Petroleum Bhd and lift investor sentiment towards its shares.
According to AmInvestment Bank Research, the oil and gas company is currently trading at a compelling valuation amid the prevailing oil price momentum, while the group’s environmental, social and governance (ESG) quality will enhance the attractiveness of the stock.
The brokerage maintained its “buy” recommendation on Hibicus, with an unchanged sum-of-parts-based fair value of 79 sen per share.
This implied an enterprise value/proven and probable reserves valuation of US$6.10 per barrel.
This presented a discount of 35% to the valuation of its closest peer, UK-listed EnQuest, of US$9 per barrel and 48% to regional average of US$11.80 per barrel.