KUALA LUMPUR (Nov 29): Hibiscus Petroleum Bhd rose 0.70% in active trade this morning, following a positive analyst review on the stock.

At 11.30am, Hibiscus added 0.5 sen to 72 sen, with 10.59 million shares traded.

Public Investment Bank Bhd Research in a note today said Hibiscus Petroleum’s 1QFY18 revenue improved to RM58.2 million (+6.4% y-o-y, -21.8% q-o-q), while recording a core net profit of RM12.8 million, supported by higher average prices recorded for oil sold in the quarter (1QFY18: USD51.54/bbl versus 1QFY17: USD45.21/bbl).

The research house explained this quarter however saw about 15 days of shutdown for initiatives undertaken to improve daily oil production rates up to circa 5,000bbls/day net oil to Hibiscus by FY20.

“Numbers were weaker sequentially, but will see better results in 2Q onwards, with additional production of c.665bbls/day from the Anasuria Cluster, due to the recent enhancement projects, while also assuming higher oil price levels.

“1QFY18 net profit estimates are deemed in line, albeit only meeting 5% of ours and 7% of consensus’ estimates, due to our inclusion of the North Sabah acquisition which we assume to begin contribution 2HFY18.

“We remain positive on Hibiscus with an Outperform call and an unchanged target price of RM1.06, premised on our sum-of-parts valuation.

“Our valuation includes the upcoming North Sabah acquisition based on its proven and probable (2P) reserves only, which we believe would add another 48 sen to the group’s underlying fair value of 58 sen,” the research house said.