UOB KayHian stays Overweight on the oil services sector, tipping a new upcycle. “Charter rates are increasing, capex is back with the oil price recovery, and demand in Asia-Pacific is expected to see a strong growth. We believe it is a matter of time before a re-rating occurs.”
Ezion has added service rigs to its fleet to fast track growth and it has a first-mover advantage in liftboats, it says. It rates Ezion Buy with $2.00 target; it has a technical Buy call with $1.68 target. Ezra is transforming into a global deepwater subsea contractor from a regional OSV player, it says, expecting the net profit uptrend to continue. It rates Ezra Buy with $1.53 target; on a technical basis, it tips waiting to see if the stock is resisted at $1.06 and $1.16.
Nam Cheong is on track to ride Malaysia’s oil and gas upcycle, it says, viewing it as a major beneficiary of government-owned Petronas’ five-year capex plan. It keeps a Buy call with $0.30 target; technically, it tips a $0.27 target if the stock is able to rebound after consolidating. Nam Cheong is flat at $0.24, Ezion is up 1.1% at $1.41 and Ezra is up 1% at $1.06.
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