Valuation 

After my writeup on GSS Energy on 1 Oct 2014, DMG Securities and Religare initiated coverage with target prices of $0.650 and $0.510, respectively. When Senergy release its valuation report on the other three fields, ii would serve as an alternative independent valuation yard stick for investors.  

chart2.15GSS Energy (fka Giken Sakata) recently closed at 28 cents for a market cap  of S$128 million. Chart: Bloomberg. 

Giken’s chart analysis

GSS Energy has been entrenched in a downtrend since Jun 2014. It has to breach the strong resistance around $0.290 – 0.300 with volume expansion for the chart to turn positive.

Near term supports and resistances are at $0.260 – 0.265 / 0.245 & $0.280 / 0.290 - 0.300 respectively.  

Conclusion – Unique business model, less affected by swings in oil price 

In a nutshell, although one of GSS Energy business segments (i.e. oil production) is the least favoured sector now, there is some merit in GSS Energy oil business model.

It is noteworthy that t
he >50% slump in oil price may not affect GSS Energy to a large extent. However, whether GSS Energy share price re-rates or not depends on the company’s FY15F results, Senergy’s report on its three fields and management’s communication of its unique business model to the investment community. 

Readers who are interested should take a look at the company's website for more information. They can also email me at This email address is being protected from spambots. You need JavaScript enabled to view it.  for the analyst reports on GSS.

 Recent story: OSK-DMG: Why Giken Sakata, Ezion, Nam Cheong, Keppel Corp & Marco Polo Marine 


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