This article first appeared in The Edge Financial Daily, on April 18, 2016.

Petronas Gas Bhd (+ve)

SHARES in Petronas Gas Bhd (fundamental: 2.7/3; valuation: 1.3/3) triggered our momentum algorithm for the first time, closing 0.09% lower at RM22.08 after reaching its intraday high of RM22.30 last Friday. The stock was relatively active with 2.77 million shares changing hands, more than double of its 200-day average volume of 1.22 million shares.

Petronas Gas’ net profit for the fourth financial quarter ended Dec 31, 2015 (4QFY15) dropped 27.4% to RM414.5 million from RM571.3 million in 4QFY14. This was despite the revenue for 4QFY15 increased by 2.3% to RM1.14 billion from RM1.11 billion in the corresponding quarter a year ago. The lower profit was mainly due to lower share of profit from joint ventures and higher operating costs.

For the full-year FY15 though, the group’s net profit jumped 7.83% to RM1.99 billion from RM1.84 billion in FY14, due to recognition of deferred tax asset arising from investment tax allowance and reinvestment allowance granted for the plant rejuvenation and revamp project amounting to RM443.1 million. Excluding impact of tax incentives and foreign exchange, profit increased by RM1.6 million or 0.1%, in line with the higher revenue of 1.46% to RM4.46 billion in FY15 from RM4.39 billion in FY14.

The total dividends for FY15 were 60 sen, an increase of five sen from 55 sen in FY14. The dividend payout saw an increase from four sen in 2011 to the current level, with a dividend yield of 2.72%.

In a filing with Bursa Malaysia, the group said its performance is expected to remain steady in FY16 amid the challenging economic environment backed by its solid business models.

Since December 31, 2015, Petronas Gas shares have dropped 64 sen or 2.82% to the current level.