KUALA LUMPUR (Sept 21): Hibiscus Petroleum Bhd's share price fell 5.38% in active trade today on profit-taking after Public Investment Bank Bhd yesterday initiated coverage on the stock with an "Outperfom" rating and a target price of RM1.06.

At 12.11pm, Hibiscus slipped 3.5 sen to 61.5 sen with 380.23 million shares transacted, making it the top active counter for a market capitalisation of RM971.27 million. Year to date, the counter has grown 52.44%.

According to SJ Securities Sdn Bhd remisier Goh Kay Chong, the counter was seeing some profit-taking after Public IB Research initiated coverage.

"I think when the research house (Public IB Research) start to cover the stock, a lot of investors got into it and bought the stock for short-term gain.

"Today, the investors are taking profit as they made money out of it," he told theedgemarkets.com when contacted.

Yesterday, Public IB Research noted that Hibiscus continued to deliver production from its first producing field, the Anasuria Cluster in UK with average circa 3,500bbls/day, anchoring its position more prominently among its oil peers.

It remains positive on the group's performance, reaffirmed by its ability and perseverance to continue securing producing assets.

Public IB Research said the group announced another milestone in October 2016, the conditional sale and purchase agreement for the group to acquire a 50% stake of the North Sabah Enhanced Oil Recovery (EOR) PSC.

"We are initiating coverage on Hibiscus with an Outperform call, with a target price of RM1.06, premised on our sum-of-parts valuation.

"Our valuation is based on the relative undervaluation of Hibiscus' Anasuria Cluster asset valued at RM0.58, based on our DCF valuation with an 11.0% WACC, and after close review of its upcoming North Sabah acquisition based on its 2P reserves only, we believe would add another 48 sen to the group's fair value," the research house had added.