PETALING JAYA: United Asiapac Energy Bhd is expected to benefit from rising demand for specialised fishing and plug and abandonment (P&A) services, with MBSB Research assigning the upcoming listing a fair value of 39 sen.
The fair value represents an 11.4% premium to United Asiapac’s initial public offering (IPO) price of 35 sen, although the research house has not assigned a rating to the stock. “United Asiapac operates in a niche segment of well intervention,” MBSB Research said.
United Asiapac is a 100% bumiputra-owned local oilfield services company scheduled to list on the ACE Market on Aug 19. The research house said Malaysia’s fishing and P&A services market is projected to expand to RM444mil by 2028 from RM165mil in 2024, representing a compound annual growth rate of 28.1%.
“This highlights a strong tailwind for companies operating directly in downhole intervention and well retirement,” it said.
Demand is expected to be supported by increased exploration and production spending, the maintenance of ageing offshore assets and the requirement to decommission mature wells.
“Fishing and P&A services are offered throughout the lifespan of a well, from the first drilling up to its abandonment,” the research house said.
The research firm said United Asiapac’s ownership of specialised downhole tools eliminates third-party rental costs, provides greater pricing flexibility and supports higher profit margins.
The company’s asset-light business model also leaves it with less debt than domestic oil and gas services and equipment players that own capital-intensive rigs or vessels.
United Asiapac operates from Kemaman, Terengganu and Labuan, positioning its equipment and personnel close to offshore operations in Peninsular Malaysia and Sabah and Sarawak.
“Proximity to Peninsular Malaysian and Sabah and Sarawak offshore fields allows faster mobilisation than foreign competitors,” MBSB Research said.
The group plans to use part of its IPO proceeds to acquire additional well-intervention tools, upgrade its Kemaman facility and expand into small-hole fishing and well cleanout services.
MBSB Research forecasts United Asiapac’s revenue to increase to RM44.7mil in the financial year ending Dec 31, 2027 (FY27) from RM39.1mil in FY26. Core net profit is expected to rise to RM14mil from RM11.3mil over the same period.
