PETALING JAYA: MISC Bhd
is entering its next phase of growth, underpinned by a disciplined capital expenditure (capex) programme as new vessel deliveries are expected to strengthen earnings through 2030.
CIMB Research, which is maintaining its “buy” call on the stock and raising its target price to RM9.25 from RM9.19, said it came away from the company’s MISC Up Close 2026 briefing feeling reassured by the group’s long-term prospects.
It highlighted that the shipping giant has committed US$4bil (RM16.35bil) to US$5bil (RM20.43bil) in capex through 2030 to fund fleet renewal, offshore expansion and new energy projects.
“We came away from MISC Up Close 2026 feeling reassured about the company’s prospects,” CIMB Research said, adding that the investment programme is set to drive its next phase of growth.
According to the report, MISC remained focused on running a steady and predictable business, supported by operational discipline, high asset utilisation and long-term contracts that provide stable cash flow and predictable shareholder returns.
While the group may increase exposure to spot charter contracts during periods of elevated freight rates, it intends to keep most of its fleet secured under long-term contracts.
An analyst told StarBiz that elevated tanker rates, supported by longer sailing distances and tighter vessel availability, should benefit MISC’s spot exposure, while growth in ultra-deepwater developments and a healthy pipeline of floating production, storage and offloading (FPSO) projects will provide the next leg of expansion.
Meanwhile, although annual capex is expected to rise sharply to US$1bil to US$1.2bil through 2030, compared with US$406mil to US$550mil historically, CIMB Research believes the balance sheet remains manageable.
It added that the investments are expected to be largely funded through operating cash flow of US$1.1bil to US$1.4bil annually, while selected offshore projects may be financed with borrowings without compromising its investment-grade credit profile.
The research house expects MISC’s debt-to-earnings before interest, taxes, depreciation and amortisation ratio to improve to 2.7 times to 2.8 times by financial year 2027 (FY27) to FY28 as newer vessels contribute higher earnings.
It pointed out that by 2030, MISC’s gas fleet is projected to expand to 50 vessels from 39, supported by 19 secured new builds, including liquefied natural gas (LNG) carriers, very large ethane carriers, a floating storage and regasification unit and liquefied carbon dioxide carriers.
Meanwhile, its petroleum fleet is expected to grow to 78 vessels from 68, with dual-fuel vessels increasing to 24.
CIMB Research forecasts earnings to grow at a 13.1% compounded annual growth rate between FY26 and FY29, driven by 9% revenue growth.
The research house also sees opportunities in the FPSO market, particularly in Brazil and Africa.
However, it believes MISC will continue pursuing capital recycling initiatives, including potential asset sales, to preserve balance sheet strength while bidding for larger offshore projects.
The company has already raised RM515mil from the disposal of ageing LNG and petroleum vessels in the first quarter of FY26.
Petroliam Nasional Bhd (PETRONAS)-linked projects will remain the group’s key growth driver, with about 60% of committed capex tied to the national oil company.
Revenue from PETRONAS-related activities, currently accounting for about 20% of group revenue, is expected to double by 2030 as MISC delivers seven LNG carriers, two Aframax tankers and two floating offshore projects.
While CIMB Research trimmed its FY26-FY28 earnings forecasts marginally by 0.3% to 1.6% to reflect higher capex, it expects earnings and cash flow from new vessel deliveries and offshore projects to come on stream progressively through 2030, supporting gradual improvement in dividend payouts.
