Malaysia Offshore Support Vessel Sector Weakness Likely Temporary — Market Talk

Near-term weakness seen in earnings of Malaysia's offshore support vessel sector should be overlooked, Maybank IB analyst Jeremie Yap says. He says investors should instead position for the sector's 2027 capital expenditure upcycle theme. Seasonal monsoon conditions from November to March typically reduce offshore activity, leading to lower vessel utilization in 1Q, he says, adding Keyfield and Perdana Petroleum are expected to be affected. However, a multi-year capital expenditure upcycle by Petronas is expected to begin in 2027, which is likely to benefit key names in the sector. Yap maintains a positive view on the Malaysian oil and gas sector, pegging Keyfield and Perdana Petroleum as its top picks. (yingxian.wong@wsj.com)