Uzma Berhad secured a RM60 million contract from EnQuest Petroleum Production Malaysia Ltd for the provision of integrated well intervention services and a project management team under the 2026/2027 Package A8.
The two-year contract, which commenced on Feb 16, 2026, underscores continued demand for upstream oil and gas services despite earlier cautious guidance in the sector.
According to a research note by Kenanga Investment Bank, the latest award lifts Uzma’s year-to-date contract wins for FY2026 to approximately RM800 million, representing about 89% of its full-year replenishment target and broadly in line with expectations.
Earnings Contribution and Outlook
Based on an estimated net margin of 7%, the contract is expected to contribute up to RM2.1 million to Uzma’s bottom line, equivalent to around 3.6% of its FY2026 earnings forecast.
Kenanga maintained its earnings projections and target price of RM0.70 for the group, pegged to an unchanged FY2027 price-to-earnings ratio of 7 times. The valuation reflects near-term uncertainties in the upstream segment as well as the group’s relatively high gearing levels.
However, the research house noted that the stock is trading at a steep 40% discount to its target sector multiple of 10 times, describing the valuation as “extremely conservative” given Uzma’s consistent earnings growth.
Resilient Core Business, Diversification Efforts
Uzma’s core oil and gas division remains supported by its focus on brownfield services, a segment that continues to generate stable demand but is currently undervalued by the market.
At the same time, the group is expanding into sustainable energy solutions, enhancing its environmental, social and governance (ESG) profile and positioning itself for longer-term growth. Its emerging digitalisation segment, particularly in geospatial solutions, is also seen as a potential future earnings contributor, albeit still small at present.
Risks Remain
Key risks highlighted include a sharp decline in crude oil prices, execution challenges in its new energy projects, and rising operating costs due to inflationary pressures on labour and materials.
Despite these risks, Kenanga reiterated its “Outperform” call on Uzma, citing its resilient orderbook and ongoing diversification efforts as key drivers for future performance.
