KUALA LUMPUR (Sept 25): Energy services firm Wasco Bhd (KL:WASCO) could have as much as RM3 billion worth of jobs on hand by early 2026 despite downside risks, Kenanga Investment Bank said.

While its mainstay pipe coating business will see tepid job flows, a stronger pipeline of engineering contracts related to floating production storage and offloading (FPSO) projects will replenish its order book following a decline in new jobs, the research house said.

Wasco has a “decent” track record, having fabricated topside modules for Yinson Holdings Bhd (KL:YINSON) for its Angola project without delays or cost overruns, Kenanga noted. “In the coming months, we expect more job wins in this sub-segment.”

The brighter outlook led Kenanga to upgrade the stock to “outperform” — in line with the majority of recommendations ­— and raised its target price by 22 sen to RM1.17.

Shares of Wasco, formerly known as Wah Seong Corp Bhd, are off lows but still down about 5% so far this year. The company has been running down its order book to about RM2 billion without new recent wins.

The stock now has four ‘buy’ calls, one ‘hold’ recommendation and one ‘sell’ rating. The consensus 12-month target price is RM1.24, according to Bloomberg. At the time of writing, the counter was traded at 98 sen, up one sen or 1.03%, valuing the company at RM751.62 million.

Kenanga said Wasco’s order book might have bottomed amid recovery in FPSO business following deferment of contracts due to the weakness in crude oil prices and US tariff uncertainties.

Wasco is still “seeing good prospects in terms of order book replenishment from its engineering division within its oil and gas business division”, the house noted.

“Nevertheless, downside to near-term earnings exists due to weak upstream activities,” Kenanga cautioned.

Brent, the global benchmark crude oil, has declined more than 10% so far this year to about US$67 (RM282.30) amid mounting worries over supply glut and easing geopolitical tensions. In August alone, oil prices fell nearly 15% year-on-year and over 3% month-on-month.