HLIB Research said it remains cautious about PetDag’s prospects.
PETALING JAYA: Petronas Dagangan Bhd
(PetDag) is expected to navigate the coming year with stable but largely capped growth prospects, as analysts foresee muted upside amid volatile fuel prices, structural shifts in fuel demand and ongoing subsidy reforms.
CIMB Research said its earnings projections for PetDag from this year to 2027 remain intact, with performance in the fourth quarter of this year (4Q25) expected to track closely with that of 3Q25.
“Commercial margins remain capped under the current volatile environment for oil prices, limiting any meaningful upside,” the research house noted.
It maintained a “hold” call on PetDag, with an unchanged discounted cash flow–derived target price of RM22.30.
It said it views the valuation of PetDag as “fair”, highlighting that the counter is currently trading at a multiple of 18.9 times next year’s price-earnings ratio (PER), which is broadly in line with its 10-year average of 20 times.
Meanwhile, Hong Leong Investment Bank Research (HLIB Research) said it remains cautious about PetDag’s prospects.
“We expect PetDag’s retail volumes to remain steady, though we remain cautious on the outlook given the gradual softening in fuel demand arising from the growing adoption of electric vehicles (EVs) in Malaysia,” the research house said.
“We believe the commercial segment will be supported by steady jet fuel prices as measured under the Means of Platts Singapore benchmark,” it added.
HLIB Research maintained its “hold” call on PetDag, with a target price of RM21.33.
“We believe PetDag’s risk-reward profile has turned more balanced at current levels, with earnings resilience largely reflected in its valuation amid prospects of softer retail volumes, while the commercial segment should remain supported by steady demand recovery in the aviation industry,” it said.
TA Research was more guarded, particularly on regulatory uncertainty following subsidy restructuring.
The research house said that while the RON95 fuel subsidy retargeting is likely to have marginal impact to domestic consumers, the removal of subsidies for foreigners might somewhat drag on overall sales volume in the immediate term.
“We believe regulatory risk remains from any expansion of the scope of the RON95 subsidy retargeting.
“The longer-term trend of migration to EVs and a more fragmented EV charging market compared with fuel retailing are factors that might structurally impact valuations further out,” it said.
TA Research maintained a “sell” call on PetDag, with a target price of RM19.60.
PetDag’s net profit fell 16.1% year-on-year (y-o-y) in 3Q25 to RM281.25mil, dragged down by weaker fuel-price trends, though earnings for the first nine months of this year (9M25) held steady at RM840.28mil. Its revenue slipped 2% y-o-y to RM9.53bil for 3Q25, and 4.4% y-o-y to RM27.69bil for 9M25.
