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Latest Development:
Uzma Berhad (UZMA, 7250, Main Market energy stock), through its subsidiary, has secured an integrated well intervention contract from EnQuest Petroleum Production Malaysia, valued at RM60 million.
The contract is for a duration of two years, effective from February 19 this year until February 18, 2028.
Analysis: Kenanga Research
Target Price: RM0.70
Rating: Outperform
Boost to Order Book:
The new contract raises Uzma’s total new orders secured year-to-date to RM800 million, representing about 89% of the brokerage’s full-year new order forecast, in line with expectations.
Net Profit Contribution & Industry Trend:
Assuming a net margin of 7%, the contract is expected to contribute up to approximately RM2.1 million in net profit, accounting for about 3.6% of the FY2026 net profit forecast.
This indicates that despite weaker guidance from Petronas, upstream service contract flows remain ongoing.
Investment Outlook:
The brokerage remains positive on Uzma, supported by its stable oil and gas business outlook, particularly its strength in brownfield projects, a segment currently undervalued by the market.
Additionally, the company is actively expanding into renewable energy, enhancing its ESG (Environmental, Social, and Governance) appeal and strengthening earnings stability.
Its geospatial solutions business also holds long-term growth potential, although its current contribution is still relatively small.
Rating & Target Price:
Maintained at “Outperform” with a target price of RM0.70.
Other Brokerages’ Target Prices & Ratings:
Phillip Capital
Target Price: RM1.10
Rating: Buy
UOB Kay Hian
Target Price: RM0.76
Rating: Buy
Public Investment Bank
Target Price: RM0.56
Rating: Outperform
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