RHB: MISC poised for FPSO growth, 'Buy' at RM9.70
The firm said MISc's first quarter (Q1) 2025 core profit of RM667.9 million came broadly within its and consensus expectations, accounting for 29 per cent of full-year estimates.
This was primarily driven by stronger contributions from the offshore segment following the start-up of Mero 3.
"The Q1 2025 results were broadly in line with our expectations, as we foresee some softness in the gas and petroleum segments in the coming quarters due to ongoing market uncertainties," it said in a note.
Meanwhile, RHB Research said MISC's offshore segment is poised for stronger performance following the first oil delivery from Mero 3, which is expected to generate steady long-term cash flows for MISC.
It also said that the company guided that liquefied natural gas (LNG) shipping rates are expected to stay subdued due to vessel oversupply, driven by high newbuild deliveries and delays in LNG liquefaction projects.
"The petroleum outlook is mixed, with VLCC rates forecasted to slightly outperform mid-sized tankers, supported by stagnant fleet growth and sustained long-haul crude demand from the Americas and the Middle East to Asia.
In addition, mid-sized tanker rates are expected to ease, in MISCs view, amid increased vessel availability, normalising from the strong levels seen in 2023 and early 2024," it said.
Overall, RHB Research has maintained its earnings estimates, as it expects some moderation from the gas and petroleum segments in light of ongoing market uncertainties.
The firm maintain its Buy recommendation with an unchanged target price of RM9.70.
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