KUALA LUMPUR: HLIB Research made note of Petronas Dagangan Bhd's flattish 1Q17 net profit in issuing a hold call on the stock with target price of RM26.70.
The research house said that Petronas Dagangan's core net profit was flattish in 1Q17 despite 11.3 per cent improvement in revenue underpinned by weaker gasoline and diesel margins caused by declining Means of Platts Singapore (MOPS) trend in the quarter as compared to rising MOPS price trend in 4Q16.
"While earnings remain resilient due to slow but steady volume growth with sustainable margins, no near term catalysts are present.
"The improved margins, in our view, have been factored into the share price already," HLIB Research said in its earnings evaluation report on Petronas Dagangan.
The research firm also cautioned that volume growth outlook remains muted for 2017 as consumer sentiment remains subdued as pump prices have risen YoY, leading to higher inflation and hence erosion of purchasing power.