PetDagang's bumper commercial gains unlikely to recur in 2H26
KUALA LUMPUR: Petronas Dagangan Bhd’s (PetDagang) commercial margins are expected to moderate in the second half of 2026 (2H FY26) as earlier price-lag gains reverse, with Brent crude prices rising towards US$90 per barrel.
Petronas Dagangan Bhd (PetDagang) has seen a rise in its commercial margins in the first half of 2026 due to temporary advantages from fuel price movements, but this is expected to decrease as Brent crude prices approach US$90 per barrel, according to Hong Leong Investment Bank (HLIB). While retail margins are anticipated to improve in the third quarter of 2026, with higher average selling prices under the automatic pricing mechanism, overall performance in the second half of the fiscal year is not expected to match the bumper results from the first half.
The government has assured a steady fuel supply through the end of 2026, which should maintain operational stability. PetDagang reported earnings of RM387.2 million in Q2 FY26, leading to a 1H FY26 core net profit of RM677.6 million, which accounted for 60.5% of HLIB's full-year forecast and 58.8% of consensus estimates. Despite these strong results, HLIB maintains a Buy rating, anticipating that the commercial segment's gains will not be replicated in the second half of the fiscal year if oil prices remain between US$80 and US$90 per barrel.
The bank remains positive on PetDagang's medium-term earnings resilience due to its diversified earnings portfolio, supply-chain strength, and growing Setel ecosystem, with a target price of RM22.37.
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