RHB initiates Orkim coverage with RM1.14 target
KUALA LUMPUR: RHB Research has initiated coverage on marine transportation company Orkim Bhd with a “Buy” recommendation and a target price of RM1.14.
RHB Research has started monitoring marine transportation firm Orkim Bhd with an optimistic outlook, according to a report. The analysis firm has assigned a "Buy" rating to Orkim, predicting a five percent annual compound growth rate in the company's core net profit from FY25 to FY28. This growth is attributed to a mix of factors, including new vessels, higher daily charter rates, and increased operating days.
RHB Research anticipates earnings reaching RM95 million in FY27 and RM99 million in FY28. These forecasts are backed by 19 existing contracts and a RM593 million time charter order book, consisting of RM106 million in firm orders and RM487 million in extension orders. The company's fleet is relatively young, with an average age of 12 years, and features shallow-draft vessels that can access smaller ports.
This younger fleet is expected to offer higher vessel uptime, more efficient engines, lower carbon emissions, and enhanced safety features. Orkim's long-standing relationships with major energy companies in Malaysia, some of which extend to 17 years, provide strong revenue visibility. However, key risks for the group include weaker demand for refinery products, piracy, lower daily charter rates, unscheduled maintenance, higher repair and maintenance costs, and geopolitical conflicts.
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