Broker: UOB Kay Hian
Date of Report: 10 June 2026
Excerpt from UOB Kay Hian report.
Report Summary
- Sector View: Maintain MARKET WEIGHT on Malaysia Oil & Gas sector due to ongoing constitutional risks and sector valuation discount.
- Top Picks & Action:
- MISC (MISC MK) – BUY, Target Price: RM9.50. MISC is favoured for its crude tanker exposure and near-term catalysts, with positive trading sentiment factored in. Investors should focus on MISC for sector exposure.
- Dialog Group (DLG MK) – BUY, Target Price: RM2.95. Dialog is identified as the new “upstream champion” with potential earnings upside from new production volumes in 2H26. Premium valuation is justified if project startups are achieved early and oil prices remain high.
- Other preferred “gems” in the sector: Uzma, Deleum, Dayang, Hibiscus.
- Key Sector Insights:
- Oil price forecasts remain above US\$100/bbl in 2H26, but sector outlook clouded by geopolitical and constitutional disputes, especially involving Petronas and Sarawak/Sabah.
- Petronas continues to drive new projects and cross-border JVs to maintain 2m boepd target, with major FIDs expected in 2027.
- Sabah is pushing for greater local participation and contract ownership in O&G projects, aiming for 60% contract and 80% employment rates for Sabahans in OGSE contracts.
- Implications:
- Monitor Petronas-Petros court resolution as a potential re-rating catalyst for the sector.
- Focus on the broker’s top picks: MISC and Dialog for actionable investment ideas with clear upside potential and defined catalysts.
above is an excerpt from a report by UOB Kay Hian. Clients of UOB Kay Hian can be the first to access the full report from the UOB Kay Hian website : https://research-api.uobkayhian.com/assets/disclaimer/df64a6ea-7980-447c-ae9e-fd19b93257dc
