MISC expected to boost earnings profile

MISC Bhd is expected to bolster its long-term earnings profile through investments in newer vessels for the expanding liquefied natural gas (LNG) trade. A recent contract win is anticipated to enhance operational efficiency and fortify its role as a critical transporter in the global energy supply chain. RHB Research has maintained a positive outlook on MISC following the group's acquisition of a letter of award for the long-term time charter of a newbuild 18,700 cubic meter LNG carrier.

This vessel will facilitate Petroliam Nasional Bhd’s (PETRONAS) ongoing LNG supply to Sendai City, Japan, and contribute to MISC's fleet renewal program. The research firm expressed satisfaction with the latest contract, stating it aligns with MISC's ongoing LNG fleet renewal strategy, and affirmed its "buy" recommendation and target price of RM9.71, which implies a potential 22% upside and a dividend yield of around 5%.

The new vessel, with a capacity of 18,700 cubic meters, is expected to replace one of MISC's aging vessels on the Malaysia-Japan trade route and improve operational efficiency through reduced fuel consumption and lower emissions intensity. RHB Research anticipates the gas assets and solutions segment to assume a larger share of MISC's earnings mix in the medium term, driven by 19 vessel additions and stronger contributions from seven LNG carrier deliveries between 2026 and 2028, complemented by improved offshore operations and strong tanker fundamentals.