ANALYSTS UPBEAT ON MISC CITE STRONG CASH FLOW

KUALA LUMPUR, Feb 24 (Bernama) -- RHB Investment Bank Bhd (RHB IB) is positive on MISC Bhd, citing its steady operating cash flow and solid balance sheet, which position it well to pursue growth opportunities in the floating production storage and offloading (FPSO) market.

In a research note, the investment bank said MISC’s ‘Mero-3’ floating production unit is expected to generate stable long-term cash flow following its first oil delivery.  

"For vessel deliveries, the group expects four, 13, and three new liquefied natural gas (LNG) carriers to be delivered in the financial years 2025 (FY2025), FY2026, and FY2027, respectively, while the term-to-spot ratio for the gas division stands at 85:15.  

“We expect the LNG shipping market to remain soft in 2025 due to an influx of new vessels and delays in additional supply from new liquefaction projects," said RHB IB.  

For petroleum, the tanker market outlook remains positive, supported by strong Atlantic exports, rising Asian crude imports, and a shrinking new-build order book.  

However, RHB IB lowered its FY2025 earnings estimate for MISC by 2.3 per cent to reflect the softer gas segment outlook but raised its target price to RM9.70 with a "buy" call.  

Maybank Investment Bank Bhd (Maybank IB) said MISC remains defensive, supported by its LNG and petroleum tankers, as well as its FPSO and floating storage and offloading assets, which provide stable recurring earnings and cash flow.  

"In our view, value has emerged as MISC now trades at just 12 times our revised FY2026 forecast. Our annual dividend per share estimate of 36 sen for FY2025 implies a yield of 5.0 per cent, which we believe supports MISC’s share price," it said.  

Maybank IB upgraded its "buy" call on MISC and raised its TP to RM8.34 from RM8.09.  

As of 10.47 am, MISC fell one sen to RM7.14, with 104,600 shares traded.  

-- BERNAMA