PETALING JAYA: Uzma Bhd
will likely face a near-term earnings setback as disruptions linked to PETRONAS Carigali’s asset transfers weigh on upstream maintenance activities, although work is gradually resuming.
In a report UOB Kay Hian (UOBKH) Research said the restructuring involves the creation of Searah, a joint venture between Italian energy company Eni and Petroliam Nasional Bhd (PETRONAS), as well as the transfer of selected assets to EnQuest Petroleum Production Malaysia Ltd and Vestigo Petroleum Sdn Bhd.
According to the research firm, it understands from channel checks that upstream maintenance contracts faced a certain degree of suspension in July 2026 to August 2026 period, but has been gradually resuming from this month onwards.
UOBKH Research said the formation of Searah could signal changes in the way oil and gas service providers work with operators.
It said Uzma had begun early engagements with the relevant operators to preserve its awarded scopes and ensure mobilisation readiness.
The research house expects the traditional contractor-principal model to gradually give way to vendors that can offer more than conventional services, including capital and active coordination.
However, UOBKH Research said Uzma’s longer-term growth prospects remain supported by its expanding non oil and gas (O&G) businesses.
The research house said the group’s non-O&G bidbook surged to RM3.8bil in June, nearly four times the previous quarter, driven by opportunities in areas such as energy trading, renewable energy and digital earth.
“For energy trading, Uzma is pursuing new third-party access natural gas contracts, whereby up to RM10bil pipeline may be available for the market.
“For new energy, Uzma is keen to bid for all three large scale solar 6 tender packages, but we reckon package 2 is likely the best in terms of risk-reward.
“It is a bumiputra open tender for 300 megawatt (MW) of solar accompanied by 150MW of Battery Energy Storage System,” UOBKH Research said.
In its digital earth business, it said negotiations for a national satellite concession are also nearing conclusion.
Despite the near-term earnings risks, UOBKH Research said these factors appeared to be largely reflected in Uzma’s share price.
It retained a “buy” call on the stock, although lowering its target price to RM0.70 from RM0.76, based on an unchanged price-to-earnings multiple of eight times.
The research house said Uzma’s longer-term prospects remained supported by its diversification into energy and technology businesses.
These assets include water injection facilities such as Marsya, deployed in 2016, and Sara, which is designed to support oil recovery from offshore fields, as well as its flagship 50MW LSS project in Kedah.
Meanwhile, its asset-light business model could position it to benefit from opportunities arising from the formation of Searah.
