The research house said MISC's recent quarterly core earnings result of RM454mil was within expectation, arriving at 21% and 24% of its and consensus full-year estimates.
It said the weak performance was owing to a huge drop in spot tanker freight rates, which dragged the group's petroleum shipping segment a well as steep losses in its heavy engineering semgnet from higher project cost provisions given delayed offshore commissioning works.
However, the weaker earnings were slightly offset by a strong offshore segment due to finance lease construction gains from the Mero-3 FPSO.
"While the recent blockage in the Suez Canal did nudge up spot rates slightly, overall spot tanker rates continue to remain sluggish.
"Vessel demolition activities continue to remain slow, on top of sizable remaining order-book deliveries," said Kenanga in a note.
The research house maintained "market perform" on the counter with an unchanged target price of RM8.10 pegged to 1.1x price-book value.
Its forecasts for FY21-22 remain unchanged.