Oil & Gas - ETP galore; maintain OVERWEIGHT (CIMB)

Investments are barrelling through for the oil & gas sector, which has grabbed 52% of total ETP committed investments. The 12 ETP oil & gas projects are expected to contribute a staggering RM64bn worth of GNI in 2020. Marginal fields and risk sharing contracts (RSC) give local service providers a shot at becoming developers and producers but are the big test for the sector. Meanwhile, the development of a regional storage and trading hub provides opportunities for downstream players. The ETP development plans keep the prospects bright and will lead to sustainable earnings for the players, supporting our projection of a high-octane 3-year EPS CAGR of 57.6%. We remain OVERWEIGHT on the sector and upgrade Perdana from Underperform to Trading Buy. Our new favourites are Petronas Dagangan (target price raised from RM18.50 to RM21.60) and Perisai.