Member Profile
i4value  |
| Total Cumulative Posts |
616 |
| Joined |
Aug 2020 |
Blogs
| Blog Title | Total Posts | Last Published |
| Investing for Value | 171 | 15 Apr 2025 |
Comments
| | User Comments |
 |  13 Jun 2025, 10:16:08 AM
Unisem: Positioned for a Rebound?
Over the past six years, Unisem (M) Berhad has evolved from a cost-focused OSAT player into a technology-driven, sustainability-aligned enterprise.
This transformation involved embedding ESG principles and digitalisation into its operations, expanding its role to a collaborative innovation partner, and investing in modern, environmentally sustainable facilities.
Despite this strategic shift, there was no sustained uptrend in profits from continuing operations. While profit after tax in 2022 was approximately three times higher than in 2019, by 2024 it had declined to a level below that of 2019.
Operationally, there was little improvement in profit margins over the six-year period, although the Selling, General and Administrative margin remained stable. As a result, ROE declined at 12 % per year compounded over the period.
According to the company, this performance stems primarily from cyclical demand weakness, underutilised capacity, and cost escalations. These challenges have masked the operational improvements and technology investments the company has made.
However, its capacity investments, customer alignment, and cost control suggest it is well-positioned to rebound once demand normalizes.
To track Unisem’s recovery, investors should watch for rising semiconductor demand and improved plant utilisation. Margin and ROE improvement would signal better cost absorption and capital efficiency. New customer wins and progress on technology and ESG goals would further support a sustainable rebound.
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| 11 Jun 2025, 9:24:00 AM
Globetronics Turnaround Hinges on Product Renewal
Globetronics’ revenue has halved over the past six years, with PAT falling from RM46 million in 2019 to RM11 million in 2024.
While gross margins held up, the shrinking topline meant fixed costs weighed more heavily on profits. The company attributes the decline to lower customer volume loadings, its exit from the quartz timing business, and COVID-related disruptions.
But the deeper issue is this: new products have not scaled fast enough to replace legacy lines. In a tech-driven industry, that is a serious concern. Globetronics’ own disclosures cite softening demand and reduced volume from key customers, but offer little mention of successful new product rollouts or major customer wins.
This absence is telling. Over several years, the company has explained revenue weakness through external factors, yet there has been no concrete sign of innovation-led growth. In a sector where new product milestones are typically highlighted, this silence suggests execution gaps in product development and commercialization.
This is the heart of Globetronics’ challenge. In tech, if new doesn’t grow, old revenue goes. A sustained turnaround will depend on the company regaining its ability to bring new, scalable products to market.
Its position in the Turnaround quadrant in the Fundamental Mapper reflects this fundamental issue.
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| 08 Jun 2025, 8:47:51 AM
Inari’s Growth Story: Strong Profits, Weak ROE
Over the past six years, Inari Amertron Berhad has achieved a 4 % CAGR in revenue while PAT grew at a double rate of 8% CAGR.
This stronger PAT growth, however, did not stem from improved cost leverage or margin expansion. As noted in the 2024 annual report, “the Group’s administrative expenses rose in line with revenue,” indicating no significant improvement in fixed cost efficiency.
Despite growing profits, Inari’s ROE fell from 18% in FY2019 to just 10% in FY2024. This decline reflects an outsized expansion in capital relative to earnings. For instance, between FY2019 and FY2024, total assets and shareholders’ equity rose at CAGR of 18 % –19%, well above the 4% revenue CAGR.
The company’s growth trajectory is also marked by a high concentration of revenue from a single customer. As disclosed: “approximately 90% of the Group’s revenue is derived from one major customer.”
This underscores a key investment risk, especially in a sector where technological shifts and client decisions can swiftly alter demand.
Taken together, Inari exhibits the financial strength typical of companies in the Gem quadrant of the Fundamental Mapper. However, its declining ROE and high customer concentration suggest elevated investment risk, even in the presence of profit growth.
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| 05 Jun 2025, 7:38:04 AM
The Price of Progress: MPI’s Growth vs Return Compression
Malaysian Pacific Industries (MPI) today is a globally competitive, innovation-driven OSAT provider with a growing focus on power electronics and next-generation technologies.
Over the past six years, MPI has evolved from a traditional OSAT-focused manufacturer into a sustainability-integrated, digitally enabled partner aligned with global megatrends such as EVs, renewable energy, and advanced power semiconductors.
This transformation has been underpinned by strategic ESG leadership, strong global customer orientation, enhanced R&D capabilities, and a resilient, skilled workforce.
In line with this strategic shift, revenue and PAT grew at a CAGR of approximately 6% over the period. However, revenue growth did not translate into proportionately higher PAT due to declining gross profit margins and rising selling, general, and administrative (SGA) expenses.
At the same time, capital employed grew faster than PAT, resulting in a decline ROE. While this declining ROE trend is common across the sector, MPI continues to outperform peers on a relative basis.
That said, the market appears to have priced in concerns about MPI’s declining returns. So, while MPI stands out on a peer-relative basis, from an investment risk perspective, it falls into the Gem quadrant of the Fundamental Mapper — reflecting strong business fundamentals but a market valuation that is cautious about future profitability.
If you are looking for deeper investing insights into the semiconductor sector on Bursa, don’t miss our upcoming podcast on 5 June — “AI & Global Demand: Fueling the Next Chip Rally?” — where we explore investing opportunities for Malaysian semiconductor stocks.
Date: 5 Jun 2025 (Thur)
Time: 8:30pm
Where: https://www.facebook.com/xifu.my
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| 04 Jun 2025, 6:06:47 AM
Growth Without Profit? Mapping D&O's Strategic Reset
D&O Green Technologies is a vertically integrated automotive LED solution provider, evolving into a one-stop platform for smart automotive lighting systems. A key innovation is its seddLED - the world’s first smart digital automotive LED that integrates both LED and IC within a single package.
Over the past six years, D&O achieved a 13% CAGR in revenue, yet PAT grew at only 2% CAGR. This discrepancy is largely due to a significant decline in gross profit margin, which dropped from 28% in 2019 to 20 % in 2024, although partially offset by improved Selling, General, and Administrative efficiency.
The margin erosion stemmed from several factors - less favourable product mix, rising input costs, higher depreciation and overhead, industry pricing pressure and foreign exchange volatility.
These structural and external challenges weighed on profitability, despite strong topline performance. It is no surprise, then, that ROE in 2024 is roughly half of what it was in 2019.
However, the outlook is not entirely bleak. While gross margins remain below historical levels, D&O’s strategic pivot toward higher-margin products, deeper vertical integration, and sustained investment in automation are showing early signs of a turnaround.
A sustained recovery will hinge on scaling production volumes, cost stabilization, and market acceptance of its advanced offerings. Given this context, it is clear why D&O falls into the Turnaround quadrant in the Fundamental Mapper.
If you are looking for deeper investing insights into the semiconductor sector on Bursa, don’t miss our upcoming podcast on 5 June — “AI & Global Demand: Fueling the Next Chip Rally?” — where we explore investing opportunities for Malaysian semiconductor stocks.
Date: 5 Jun 2025 (Thur)
Time: 8:30pm
Where: https://www.facebook.com/xifu.my
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| 03 Jun 2025, 4:57:01 PM
JHM’s Inflection Point: Signs of a Turnaround Ahead?
JHM Consolidation Berhad is a one-stop engineering and manufacturing solutions provider serving the automotive, industrial, semiconductor, and telecommunications sectors.
It supports the semiconductor sector at the upstream level by supplying precision mechanical parts for semiconductor equipment. It also produced hermetic enclosures and connectors used in semiconductor modules, and assemble electrical and optical modules for semiconductor and industrial applications.
Over the past six years, JHM’s revenue has declined at a compounded rate of approximately 2% annually. This decline was driven by reduced orders from key automotive customers, the lingering effects of the COVID-19 pandemic, supply chain disruptions, delayed project launches, and rising input and labor costs.
As such from a profitable position in 2019, JHM slipped into losses in 2024. The decline was exacerbated by a narrowing gross profit margin and higher Selling, General, and Administrative expenses. These structural pressures challenged operating leverage, despite capacity expansion initiatives.
However, 2024 may mark the bottom. The Q1 2025 results indicate revenue improvement and a narrower loss. Additionally, JHM reportedly secured a contract to supply automotive parts to the U.S. and is exploring EV battery pack assembly - initiatives that could support a turnaround and eventually improve its position in the Fundamental Mapper.
If you are looking for deeper investing insights into the semiconductor sector on Bursa, don’t miss our upcoming podcast on 5 June — “AI & Global Demand: Fueling the Next Chip Rally?” — where we explore investing opportunities for Malaysian semiconductor stocks.
Date: 5 Jun 2025 (Thur)
Time: 8:30pm
Where: https://www.facebook.com/xifu.my
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| 31 May 2025, 11:58:01 AM
CSC Steel - Benjamin Graham Would Love This Stock
CSC Steel Holdings Berhad is one of the more prominent cold-rolled steel producers in Malaysia. The company is majority-owned by China Steel Corporation (CSC) of Taiwan, and several members of its senior management team are seconded from the parent company. Its principal raw material - hot-rolled steel coils - is primarily sourced from the parent group ensuring supply chain stability.
While the steel industry is inherently cyclical, CSC Steel has demonstrated resilience across market cycles, having remained profitable in nearly every year over the past two decades. The sole exception was in 2014, when the company incurred a loss due to a combination of global oversupply, aggressive low-cost imports, and a sharp decline in steel prices.
The most recent industry bottom occurred in 2020, following the peak in 2022. At present, the market appears to be in the downward leg of the cycle. Despite this, CSC Steel managed to remain profitable throughout the 2019–2024 period, although 2021 was an outlier year in which the company did not generate positive operating cash flow.
Over this five-year span, the company achieved a Return on Equity (ROE) ranging from 1.7% to 9.9%, with an average of approximately 5% -ma modest but consistent performance.
What stands out about CSC Steel is its valuation. The current share price of RM 1.18 trades significantly below its Graham Net-Net value of RM 2.00, a conservative estimate often used as a proxy for liquidation value. Given its clean balance sheet, consistent profitability, and strong backing from CSC Taiwan, CSC Steel does not exhibit any signs of financial distress.
This combination of subdued business performance and low investment risk places CSC Steel on the borderline between the “Goldmine” and “Turnaround” quadrants of the Fundamental Mapper - an apt reflection of its value-oriented appeal.
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| 28 May 2025, 3:43:16 PM
ASTEEL’s Reinvention: Can a Downstream Focus Reverse Years of Losses?
ASTEEL Group (formerly known as YKGI Holdings Berhad) is today primarily engaged in the manufacturing and trading of steel-related products.
Prior to 2019, the company operated in both the upstream and downstream steel segments. Its upstream operations—which included the production of cold rolled coils and galvanized coils - were capital-intensive and faced intense competition from low-cost imports, particularly from China. As a result, the group suffered significant losses due to industry overcapacity, volatile steel prices, and thin margins.
In 2018–2019, the company exited the upstream business with the disposal of its Bukit Raja plant. This strategic move aimed to stem losses, reduce debt, and reposition the group toward higher-margin downstream manufacturing and trading activities.
In 2023, the company was rebranded as ASTEEL Group, with a renewed focus on downstream steel products - particularly roofing systems and structural components.
Although the company has not yet returned to consistent profitability - recording losses from 2022 to 2024 - there are signs of recovery. Over the past six years, revenue has grown by 4.3% CAGR, and gross profit margins have shown improvement, indicating early progress in its turnaround efforts.
As such you should not be surprise to see that if falls into the Turnaround quadrant in the Fundamental Mapper.
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| 21 May 2025, 7:06:29 AM
Recasting the Business: How Mayu Global Left Steel Behind
Mayu Global, formerly a steel-centric industrial group prior to 2020, has transformed into a diversified entity with property development now a central pillar of its business.
In 2019, the steel segment generated approximately RM150 million in revenue. However, this has declined by about two-thirds to an average of RM50 million annually over the past three years. This shift away from steel is understandable, as the segment has been consistently unprofitable over the past six years.
While the move into property development was initiated by the previous board in 2018, the change in controlling shareholders around 2022/23 appears to have solidified the group’s strategic pivot. Under the new leadership, there has been a marked increase in execution focus and capital commitment toward property projects.
In 2023, property development accounted for about ¾ of the group’s total revenue. Although this reduced to half in 2024, the property development segment still accounted for a big part of the profits in 2024.
Given the business mix today, peer comparisons would be more meaningful against property developers rather than steel manufacturers.
Hot rolled steel prices have risen by about 20% since the start of the year. Will this boost the performance of the steel flat companies? If you want to understand more about the impact of the steel price on other Bursa flat steel companies, join me this at this Thursday podcast
Date: 22 May 2025 (Thu)
Time: 8:30pm
Link: https://www.facebook.com/xifu.my
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| 20 May 2025, 7:09:55 AM
Eonmetall's Pivot: Rebuilding After Revenue Declines
Eonmetall Group Berhad is a Malaysian-based industrial company specializing in flat steel products and industrial racking systems. The company is vertically integrated, encompassing machinery manufacturing, IT solutions, and renewable biomass ventures.
Six years ago, approximately 50% of Eonmetall's revenue was derived from exports. However, by 2024, this figure had declined to around 33%.
A significant factor contributing to this reduction was the imposition of U.S. anti-dumping duties on Eonmetall's boltless steel shelving units in 2023. This led to a 33% drop in revenue compared to 2022, with exports to the U.S. plummeting from 38% of total revenue in 2022 to just 3% in 2024.
In response to the loss of the U.S. market, Eonmetall focused on expanding its domestic sales. While this strategy helped mitigate some of the revenue loss, the company's total revenue in 2024 remained approximately 25% lower than in 2022.
Despite the revenue challenges, Eonmetall returned to profitability in 2024, achieving a marginal Return on Equity (ROE) of 0.7%. This marks a recovery from the losses experienced in 2023. To regain its pre-2023 average ROE of 8%, the company will likely need to rebuild its export markets and explore new international opportunities.
The market price of Eonmetall's stock has been declining over the past three years, reflecting the company's declining business performance during that period. However, this downturn may not fully account for the potential turnaround, as the stock is currently trading at approximately one-sixth of its book value.
Given the improving performance in 2024 and the company's return to profitability, it appears that the market may have overreacted, potentially presenting an undervaluation opportunity from an asset value perspective. You should not be surprise to see it falling into the Turnaround quadrant in the Fundamental Mapper
If you want to understand more about the impact of the steel price on other Bursa flat steel companies, join me this at this Thursday podcast
Date: 22 May 2025 (Thu)
Time: 8:30pm
Link: https://www.facebook.com/xifu.my
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| 19 May 2025, 12:32:57 PM
Can Exports Forge a Stronger Future for Mycron?
Mycron operates in both the midstream and downstream segments of the steel value chain, supplying Cold Rolled Coil (CRC) products, steel tubes, and related steel items to domestic and international markets.
Over the past six years, CRC has consistently contributed the largest share of revenue but has shown greater earnings volatility. In contrast, the steel tube segment has provided more stable profitability, particularly during downturns in the CRC business.
The Group was profitable in only three of the past six years, with earnings closely tied to favourable pricing and volume dynamics:
- In 2021 and 2022, profits peaked alongside the global steel price cycle, driven by elevated selling prices and strong gross margins.
- In 2024, despite gross margins being about half of those in 2021–2022, profit rebounded due to a 50% surge in sales - largely from export-driven growth in CRC. Mycron capitalised on trade disruptions, particularly benefiting from CPTPP market access as competitors like China and Vietnam faced tariff barriers.
If Mycron sustains its export momentum, especially in CRC, its performance in the next steel price cycle could surpass that of the last, enhancing its turnaround prospects.
If you want to understand more about the impact of the steel price on other Bursa flat steel companies, join me this at this Thursday podcast
Date: 22 May 2025 (Thu)
Time: 8:30pm
Link: https://www.facebook.com/xifu.my
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| 15 May 2025, 7:36:41 AM
Hiap Teck: When Half the Profit Lies Off the Balance Sheet
Hiap Teck derives the bulk of its revenue from two main segments: trading and manufacturing.
- The trading segment focuses on the import, export, general distribution, and leasing of steel products, hardware, and building materials.
- The manufacturing segment covers the production, sale, and rental of pipes, hollow sections, scaffolding equipment, and other steel-related products.
Although Hiap Teck holds a 27.3% stake in a steel plant in Terengganu that produces slabs and billets, this investment is accounted for using the equity method - its share of profit or loss appears as a single line item in the income statement.
Ironically, from FY2019 to FY2024, nearly half of Hiap Teck’s cumulative profit after tax came from this associate. As such, evaluating Hiap Teck’s business outlook and intrinsic value likely calls for a sum-of-the-parts valuation approach rather than relying solely on consolidated figures.
Along this line, looking at operating profit and returns based only on NOPAT from the consolidated segments provides only half the picture. To gain a true sense of value and performance, the contribution from the associate should be considered separately.
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| 06 May 2025, 10:14:56 AM
Sapura Energy Berhad is a Malaysia-based global energy services provider, operating in over 10 countries with core businesses in EPCIC (engineering and construction), operations and maintenance, and tender-assist drilling.
Financial strain began in late 2019, driven by unprofitable legacy fixed-price contracts, a heavy debt burden from earlier expansion, and tightening working capital. The COVID-19 pandemic worsened the situation, causing delays, cost overruns, and liquidity stress.
While the company generated operating profits in most of the past 6 years, net losses were driven by significant write-offs, impairments, and high interest expenses. The positive PAT in 2025 was primarily due to gains from the disposal of investments.
By 2022, Sapura Energy was classified as a PN17 issuer, prompting a comprehensive Reset Plan focused on debt restructuring, exiting loss-making segments - particularly exploration and production - and refocusing on core operations. It also launched Kitar Solutions, a joint venture offering offshore decommissioning services, aligning with its sustainability goals and energy transition strategy.
However, the turnaround and restructuring plan did not anticipate renewed oil price declines stemming from tariff-related tensions. Lower prices now add pressure on revenue and cash flows, with recovery hinging on timing, execution discipline, and continued stakeholder support.
For most retail investors, Sapura Energy remains a high-risk proposition - best approached by those with expertise in financial restructuring and the oil and gas sector.
If not Sapura Energy, what about others? If you want to find out about investing in the Petronas group of companies, join me at today’s podcast
Date: 6 May 2025 (Tue)
Time: 2030pm Malaysian time.
Link: https://www.facebook.com/xifu.my
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| 05 May 2025, 12:06:13 PM
Reach Energy: A Turnaround at a Crossroads
Reach’s core business is the exploration, development, and sale of crude oil and petroleum products. Since 2019, the company has been in turnaround mode, and while losses have narrowed significantly, it still remained in the red in 2024.
A major shift came in 2023 when Super Racer Limited, a Hong Kong-based investor, became the controlling shareholder through a debt-to-equity swap. The board was restructured, and strategic control shifted from Malaysian operators to Hong Kong financial professionals.
Reach began repositioning itself - from a technically driven E&P operator to a financially driven energy investment platform. The focus shifted from field expansion to balance sheet repair and asset optimization.
Now, just as the turnaround seemed to be gaining traction, the company faces a new challenge: declining crude oil prices triggered by tariff pressures. This may force Reach to accelerate its repositioning - prioritizing:
- Cost containment and operational downsizing
- Asset monetization or divestment
- Diversification beyond upstream oil and gas
In short, Reach Energy is no longer a straightforward oil producer. For fundamental investors, unless there is high conviction in a clear catalyst or turnaround outcome, it remains a speculative and special situation play.
If not Reach, what about others? If you want to find out about investing in the Petronas group of companies, join me at this week’s podcast
Date: 6 May 2025 (Tue)
Time: 8:30pm
Link: https://www.facebook.com/xifu.my
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| 02 May 2025, 9:14:11 AM
Can Hibiscus Withstand the Slide in Oil Prices?
In 2024, Hibiscus can be described as a regionally focused, independent upstream oil and gas company. It has operatorship control over a diversified portfolio of producing and development assets across Malaysia, Vietnam, and the United Kingdom.
This marks a significant evolution from just six years ago, when Hibiscus had only two core assets. Since then, its total assets have nearly tripled, from RM2.4 billion in 2019 to RM6.6 billion in 2023, reflecting the company’s strategic acquisition-led growth.
To fund this expansion, Hibiscus has tapped both debt and equity markets. Between 2019 and 2024:
- Total debt increased from RM5 million to RM749 million
- Total equity expanded from RM1.2 billion to RM3.1 billion
While ROA improved from 11.6% in 2019 to 13.1% in 2024, the enlarged capital base has diluted returns to shareholders. ROE declined to 16.1% in 2024, down from 20.6% in 2019, despite a spike to 35.5% in 2022 following the Repsol acquisition and elevated oil prices.
With crude oil prices declining in the wake of ongoing trade tensions and tariff-related uncertainties, there are concerns about Hibiscus’s ability to sustain its current profit levels.
Lower demand and weaker pricing could pressure margins, particularly given the company’s increased cost base. The declining share price since the start of the year may be a reflection of these market concerns.
However, one mitigating factor is the historically moderate correlation between oil prices and Hibiscus’s ROE. Over the past 12 years, the correlation between year-end Brent crude prices and the company’s ROE has only been about 40%.
This suggests that while oil prices do influence profitability, ROE is shaped by a more complex mix of factors — including production volume, capital discipline, cost control, and timing of investments. As such, the potential profit impact of lower oil prices may not be as severe as feared.
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| 29 Apr 2025, 12:08:29 PM
MISC: A Transformation in Progress, Returns Yet to Follow
Between 2019 and 2024, MISC Berhad transitioned from a conventional energy shipping company into a forward-looking provider of sustainable maritime and energy solutions. This transformation was shaped by decarbonisation trends, the energy transition, and a strategic push toward innovation.
A key milestone was the successful commissioning of the FPSO Marechal Duque de Caxias in Brazil, with the Offshore Business contributing about 12% of Group revenue in 2024.
Despite these strategic shifts - global expansion, entry into deepwater markets, and fleet modernisation - financial returns have yet to show meaningful improvement.
ROE in 2024 stood at 3.2%, below the 4.0% recorded in 2019, despite a brief rebound during 2022–2023. This reflects a transitional earnings phase, as capital-intensive projects like FPSOs and low-emission tankers are only beginning to contribute materially to earnings.
Legacy challenges, especially in Marine & Heavy Engineering, and a large equity base have also suppressed ROE. As a result, MISC currently maps into the Quicksand quadrant in the Fundamental Mapper—where strategic intent is clear, but financial outcomes lag.
However, this should not be mistaken for a failed transformation. With new assets now operational and legacy drag expected to ease, MISC is well-positioned to improve its returns - though the market has yet to fully price in this potential.
In the context of the Fundamental Mapper, MISC could move out of its current position in the Quicksand quadrant once improving returns begin to materialise. The recent decline in its share price suggests that the market has not yet recognised this trajectory.
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| 24 Apr 2025, 12:03:33 PM
From Shipbuilder to Profit Machine: How Coastal Contracts Reinvented Itself
On a weekly chart for Bursa Coastal Contracts, the technical picture remains bearish. The stock is in a long-term downtrend, with selling pressure evident in the momentum indicators and weak participation reflected in below-average trading volume.
However, the fundamentals tell a different story.
In 2019, Coastal was primarily engaged in shipbuilding, ship repair, and vessel chartering. Yard operations and marine-related activities were the core of its business. Since then, the company has undergone a strategic transformation:
- 2021–2023: Coastal significantly reduced its emphasis on shipbuilding and shifted its focus toward offshore gas infrastructure, particularly in gas processing and compression services.
- 2024: Coastal is now predominantly involved in energy infrastructure support services, delivered through long-term contracts under joint ventures - most notably the Perdiz and EMC gas compression projects in Mexico.
This transformation has placed the company in a stronger profit position. Return on equity rose from 1.2% in 2019 to 9.3% in 2024, reflecting improved capital efficiency and a more resilient income base.
Importantly, this change in business model is fortuitous, given the declining crude oil prices following the global tariff war. In 2019, Coastal's performance was closely tied to oil prices, as demand for newbuild vessels and charter services moved in tandem with offshore exploration activity.
By contrast, in 2024, while it still serves the upstream oil and gas sector via PEMEX, its exposure to volatile crude prices is now indirect.
Yet, the recent decline in Coastal’s stock price appears disconnected from its improved fundamentals and reduced risk profile - as illustrated in the Fundamental Mapper.
If you want to understand more about the impact of declining crude oil prices on other Bursa E&P companies, join me this at today’s podcast
Date: 24 April 2025 (Thu)
Time: 8:30pm
Link: https://www.facebook.com/xifu.my
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| 22 Apr 2025, 9:28:06 AM
Yinson’s FPSO Fortress: Immune to Oil Price Swings?
On a weekly chart, Yinson stock is in a clear downtrend with negative momentum, but the volume spike may signal growing investor attention — either panic selling or the start of bottom fishing. Watch closely for price stabilization or divergence in MACD to confirm a possible reversal.
Fundamentally, Yinson remains anchored by a resilient FPSO business that has grown stronger, more tech-driven, and better aligned with ESG priorities over the past six years. Its foray into renewables has de-risked the business without diluting its FPSO identity, which continues to serve as the financial and operational core.
Yinson’s FPSO revenue is contract-driven, offering long-term stability and earnings visibility with minimal sensitivity to crude oil prices. Revenue growth is primarily driven by project execution, fleet expansion, and operational performance - not oil price movements.
As such, a short-term decline in crude oil prices due to tariff-driven macro concerns should not materially affect Yinson’s profitability in the immediate to short term.
However, it is important to note that future demand for FPSO projects is indirectly tied to crude oil prices, as lower prices can reduce upstream investment appetite. If prices remain depressed over a prolonged period, this could slow the award of new FPSO contracts and affect long-term growth prospects.
Given this context, the recent decline in Yinson’s share price could reflect market concerns over a potential prolonged downturn in crude oil prices and its implications for future contract flow, even if near-term earnings remain stable.
If you want to understand more about the impact of declining crude oil prices on other Bursa E&P companies, join me this at this Thursday podcast
Date: 24 April 2025 (Thu)
Time: 8:30pm
Link: https://www.facebook.com/xifu.my
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| 20 Apr 2025, 2:04:37 PM
Is the Market Sleeping on Bumi Armada’s Turnaround?
Over the past six years, Bumi Armada has transitioned from a dual-segment model - comprising FPSO operations and Offshore Marine Services - into a focused, integrated offshore production business.
The offshore support vessel segment was gradually scaled down, and by 2022, all operational assets were consolidated under a single Operations unit. A new Technology, Engineering & Projects unit was also established to provide engineering consultancy and project support services.
Geographically, Bumi Armada streamlined its footprint while maintaining a presence in key offshore regions across Asia, Africa, and Europe. By 2023, its operations spanned five continents, but with fewer, more strategically aligned assets focused on high-value, long-term production contracts.
These strategic shifts have yielded strong results. Net profit surged from RM 38 million in 2019 to RM 656 million in 2024, while ROE improved from 1.2% to 11.3%. This improvement is reflected in its Goldmine quadrant in the Fundamental Mapper.
Can this performance be sustained amid declining crude oil prices triggered by the current tariff war?
According to the company, its core revenue is not directly tied to crude oil prices. This is due to its long-term, fixed-rate FPSO contracts, which provide stable cash flows regardless of short-term oil price movements.
While broader market conditions - such as lower crude prices - may affect future contract opportunities or investment cycles, Bumi Armada’s current revenue base remains largely insulated from these fluctuations.
Has the market missed this picture, given the declining stock price since the start of the year?
If you want to understand more about the impact of declining crude oil prices on other Bursa E&P companies, join me this at this Thursday podcast
Date: 24 April 2025 (Thu)
Time: 8:30pm
Link: https://www.facebook.com/xifu.my
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| 18 Apr 2025, 11:10:38 AM
Petra Energy's Comeback Story—Is It Already Under Threat?
In 2019, Petra Energy was primarily a brownfield services provider, focused on hook-up and commissioning, maintenance, construction and marine support. By 2023/24, it had transformed into a petroleum contractor and operator:
- Sole operator of the Banang oilfield under a Technical Services Agreement with PETRONAS.
- Production sharing contract (PSC) operator for Block SK433 (onshore Sarawak) via a Petroleum Contract with PETROS.
This marked a strategic leap from service contractor to resource holder. Profitability declined from 2019 to 2022 due to transitional costs, pandemic-related project delays, and early upstream investments.
A turnaround followed in 2023, driven by improved marine utilization, stronger service execution, and higher contributions from Banang. This progress is reflected in its Goldmine position on the Fundamental Mapper.
Yet, just as returns improve, Petra now faces the challenge of falling crude oil prices. While its PSC terms are undisclosed, such contracts typically link revenue to oil prices through cost recovery and profit-sharing mechanisms.
If prices stay low, financial performance may come under renewed pressure - depending on the duration of the current tariff war. The question is: Has the market priced this in?
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