PETALING JAYA: AmInvestment Bank Bhd has initiated coverage on MISC Bhd
, noting its two defensive traits.
In a report, the research house said the global energy-related maritime solutions provider has a sustained 8% to 10% free cash flow (FCF) strength which creates a tangible upside to payouts, and a 9% three-year earnings compounded annual growth rate driven by new liquefied natural gas (LNG) carriers’ deliveries and full-year uplift from floating production, storage and offloading (FPSO) vessel Mero-3.
AmInvestment said MISC generated about RM3.7bil in FCF for financial year 2025 (FY25), implying an attractive FCF yield of 10%.
“Near-term FPSO upside is more likely from LatAm, as local awards look less favourable,” it said.
“We assume one mid-sized FPSO win, adding about 30 sen per share to our target price (TP),” the research house added.
AmInvestment has MISC on a “hold” call with a TP of RM8.80 per share.
It said the share price rebound suggests the market has already priced in an earnings recovery for the group.
For its LNG carriers, the research house is expected to result in an earnings rise of 6% and 11% year-on-year in FY26 and FY27, as fleets expand and charters normalise at modest forward rates.
This will support recovery towards RM2.9bil in profit after tax by forecast FY27.
Meanwhile, AmInvestment said MISC has been fairly valued at a nine times forward enterprise value to earnings before interest, taxes, depreciation and amortisation (EV/Ebitda).
The research firm explained in its FY26 estimates, MISC is trading at 8.6 times forward EV/Ebitda, broadly in line with its five-year average.
“In our view, MISC’s earnings should stabilise in 2026 with improving cycle conditions as new LNG vessel deliveries support charter renewals at better rates and lift earnings visibility into forecast FY26 to forecast FY28. Its current valuation is supported by cash strength and dividends,” it explained.
AmInvestment said risks to the group include delayed LNG shipping, asset impairment risks and geopolitical and trade disruptions.
