PETALING JAYA: MISC Bhd
’s share price may have retraced, but the tanker boom underpinning its earnings outlook appears to be gaining further momentum.
UOB Kay Hian (UOBKH) Research previously expected MISC’s share price to underperform in the second half of 2026 (2H26) compared with 1H26.
Since then, the company’s share price has retraced about 8%, the research house highlighted.
“We earlier took the view that, despite our fundamental liking for the stock, MISC was unlikely to replicate its commendable 1H26 price outperformance in 2H26,” UOBKH Research said.
This was primarily because MISC confirmed that it is considering the privatisation of Yinson Holdings Bhd.
Additionally, it noted that uncertainty over the deal’s timing and MISC’s three times net debt-to-earnings before interest, taxes, depreciation, and amortisation ratio raised concerns over a potentially volatile outcome.
Hence, the research house had advised risk-averse investors to wait and see before taking new positions.
However, it said the tanker market has strengthened further, with tankers increasingly being viewed as strategic assets for energy security.
UOBKH Research added that the current tanker boom could prove stronger than the 1H26 cycle, with MISC riding a tanker market operating at levels surpassed only once before, during the major 2004 to 2008 supercycle.
“That supercycle was a demand-driven multi-year boom as China’s economy accelerated after it joined the World Trade Organisation,” the research house said.
In contrast, the 2026 cycle is being driven by supply-side disruptions, including vessel constraints, maritime chokepoints and sanctions, which have created inefficiencies and lengthened shipping routes, boosting tonne-miles despite weaker demand, the research house noted.
UOBKH Research elaborated that tanker rates had surged amid disruptions following the effective closure of the Strait of Hormuz since the onset of the West Asia war.
The increasingly volatile Middle East situation, including renewed US-Iran fighting and disruptions around the Bab el-Mandeb Strait, has further disrupted oil flows and extended shipping routes.
“These decoupled very large crude carrier (VLCC) earnings and pushed rates to all-time highs,” it said.
For the week ended Sept 2, 2026, average VLCC daily spot rates reached US$376,871, while several reports cited Gulf-China rates above US$800,000.
As MISC is the only local listed proxy to the tanker boom, UOBKH Research sees trading opportunities for investors to capitalise on the strong market.
The research house also highlighted that MISC’s petroleum division recorded its strongest quarterly profit on record.
The segment’s second-quarter 2026 (2Q26) profit of US$232mil alone nearly matched subsidiary AET’s 2023 profit base of US$236mil.
Excluding a US$23mil net income adjustment for two multipurpose cargo vessels and a US$34mil VLCC disposal gain, the petroleum segment still posted US$175mil in 2Q26 profit, compared with US$129mil in 1Q26.
The latter included a US$40mil VLCC disposal gain.
UOBKH Research said MISC could positively surprise the market with the 2H26 earnings if it continues to actively manage its crude tanker fleet at the same intensity seen in 2Q26.
It maintained a “buy” rating on the stock with a target price of RM9.50.
