Kenanga Research said the Kelindang Cluster project win is a positive.
PETALING JAYA: Analysts deem MISC Bhd
’s recent charter contract win from PETRONAS Carigali Brunei Ltd (PCBL) for the Kelidang Cluster floating production, storage and offloading (FPSO) vessel in Brunei as commercially viable.
The contract structure comprises a 12-year firm charter period plus three optional extensions of one year each, effective upon formal acceptance of the floating production unit (FPU) by PCBL.
The operations are scheduled to commence in the first half of financial year 2029, consistent with the project’s field development timeline.
BIMB Research in a note to clients said “we estimate the project is commercially viable at an estimated day rate of US$500,000 and capital expenditure (capex) of US$1bil.
“Using these assumptions, the research house raised MISC’s financial year 2026 (FY26) to FY27 earnings estimate by around 10%, reflecting the recognition of construction gain from the FPSO Kelidang project.
The Kelidang Cluster is an ultra-deepwater gas development offshore Brunei, targeting a gas handling capacity of up to about 450 million standard cubic ft per day with subsea tie-backs to multiple wells.
BIMB Research maintained a “buy” call on MISC with a target price (TP) of RM9.80 per share.
“We favour MISC due to being beneficiaries of robust FPSO demand, recurring income from its asset-leasing business model and a decent dividend yield of around 4% to 5%,” the research house added.
Meanwhile, Kenanga Research said the Kelindang Cluster project win is a positive, as this is another major win for the MISC group’s offshore division after the delivery of FPSO Mero 3 in Brazil.
“In terms of project execution, it would be technically less demanding compared to Mero 3, as the FPU typically has less complexity than FPSO projects of similar size.”
While the capex number was not disclosed, Kenanga Research said it estimated it could be at around US$600mil, due to its deepwater status.
“By assuming a project internal rate of return of 9%, a weighted average cost of capital of 6% and a 70% debt funding structure, we arrive at a discounted cash flow value of RM420mil, translating into 10 sen per share accretion into our sum-of-parts valuation.
“The yearly pre-tax profit contribution of the project could amount to about RM114mil per annum, representing 5% of the FY25 pre-tax profit forecast,” it noted.
Kenanga Research has an “outperform” call on the stock with a higher TP of RM8.65 a share, up fromRM8.55 previously.
The research house likes MISC due to its recent fleet expansion and modernisation, a decent dividend yield from its recurring cash flow and strong balance sheet, and the long-term growth trend of its liquefied natural gas business.
