Hong Leong Investment Bank Bhd (HLIB) maintained a BUY call on Hibiscus Petroleum Bhd with an unchanged target price of RM2.74, as analysts highlighted expectations of a recovery in 2HFY26 supported by higher oil prices, improved lifting volumes and stronger realised prices amid ongoing global supply disruptions linked to the US-Iran conflict.
HLIB said oil markets remain structurally tight following significant disruptions in Middle East supply, with analysts citing Rystad Energy estimates that about 44% of crude output from key producers has been taken offline since the onset of the Iran war. They noted that even at sustained prices of US$100 per barrel, replacement of lost supply would remain challenging, reinforcing a higher-for-longer oil price environment.
Analysts added that Southeast Asia’s upstream sector is facing a mixed outlook, with near-term risks from higher operational costs, fuel constraints and offshore delays, but longer-term upside from increased exploration activity and renewed interest from international and national oil companies. HLIB said this could position the region as an alternative supply hub amid geopolitical instability.
HLIB also highlighted that Brent crude has rallied more than 60% since late February, peaking near US$120 per barrel, with elevated volatility persisting as maritime restrictions continue in key shipping routes. Analysts said sustained geopolitical tensions are acting as a key support factor for oil prices.
For Hibiscus Petroleum, analysts expect earnings to recover in the second half of FY26 as production normalises following earlier maintenance and shutdown-related disruptions across key assets. They noted that higher realised oil prices, which are typically benchmarked to Brent at the point of offtake, are expected to directly lift earnings as volumes stabilise.
HLIB also revised its dividend expectations higher, lifting FY26 DPS forecasts to 10 sen from 7 sen, reflecting stronger oil price assumptions. Analysts said Hibiscus remains well positioned as a pure upstream play, offering direct leverage to Brent movements, with every US$10 per barrel increase potentially having a meaningful positive impact on earnings and valuation.
As of 11.40 am, Hibiscus’ stock price was noted at RM2.16.
