Hibiscus Petroleum Berhad: Episode 3 - Revenge of the Supply Chain

This stock has risen by 80% since my first report in Apr 2020... but there's still another 40% upside remaining!

Here are two related interviews to whet your appetite before the article:

Click here to navigate to the [01:28] timestamp of the above Bloomberg interview with Soros Fund CEO Fitzpatrick, where she makes the following comment about the trajectory of fossil fuel prices going forward:

“I think the interesting thing is when you look forward, high fossil fuel prices are not necessarily a “bug” of ESG, but it’s a function… it’s by design, you will promote transition to cleaner energy with higher fossil fuel prices… so while not the cause here, I think when we look forward, this is going to be the new norm where you see spikes in energy prices, and it’s something I think we have to get used to…

Now, moving on to the main topic…

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Hibiscus Petroleum Berhad: A Small-Cap Upstream O&G Brownfield Operator

• We explore the impact of the recent announcement of Hibiscus’ recent VIC/P74 greenfield acquisition on the company’s valuations.

• Under reasonably conservative assumptions, there should still be about 40% upside remaining from the latest share price of RM 0.82.

• While Hibiscus’ share price is very much contingent on current oil prices - it also means that if oil prices rise from here, its trading share price on any given day should reflect higher multiples.

If you’ve been following my blog for awhile, you’ll know that I’m a huge fan of the Malaysian small-cap upstream O&G company - Hibiscus Petroleum Berhad (‘Hibiscus’).

YTD share price performance of Hibiscus Petroleum

I’ve written at length about them in the past, and you can find my earlier articles about them here:

Hibiscus Petroleum Berhad (5199.KL)

Hibiscus Petroleum Berhad (5199.KL) - Part 2