PETALING JAYA: MISC Bhd
’s gas segment is currently facing headwinds from the US-Iran war in the Persian Gulf, but it is also expected to deliver stronger earnings in financial year 2026 (FY26).
“This is with delivery of new liquefied natural gas (LNG) vessels as well as lower impairment risk following the increase in day rate,” said BIMB Research.
The research house said despite these challenges, management maintains that earnings visibility for the gas segment remains intact.
This resilience is underpinned by long-term time charter party (TCP) contracts, which secure fixed charter income.
It said the incremental costs such as fuel and insurance are largely passed through to charterers, preserving margins.
Management also highlighted that there have been no requests from counterparties, including QatarEnergy, to renegotiate existing TCP terms, with the current focus centred on operational safety.
Crucially, the force majeure declarations apply to LNG buyers rather than shipping providers, it added.
BIMB Research maintains its “buy” call on MISC with a target price of RM9.80 a share.
This implies a 1.1-times FY26 price-to-book and a 15.6-times FY26 price-to-earnings ratio.
The research house favours MISC due to its being a beneficiary of robust floating production, storage, and offloading demand, recurring income from its asset-leasing business model, and a decent dividend yield of 4% to 5%.
It said MISC is actively executing a fleet rejuvenation strategy. Currently, it has a robust order book of 18 new vessels scheduled for delivery between 2026 and 2030, comprising 12 wholly-owned LNG carriers, four LNG carriers under joint ventures, and two very large ethane carriers.
All new builds are secured by long-term contracts. Against this, eight vessels are approaching contract expiry, while four older units remain on lay-up.
It said the legacy steam vessels remain structurally uncompetitive in the spot market at a day rate of US$20,000 per day (versus US$200,000 per day for modern LNG vessels) and would require drydocking and capital upgrades to be redeployed.
As such, management remains disciplined, opting not to reactivate these assets without firm long-term charter commitments.
