PETALING JAYA: RHB Research is positive on Orkim Bhd
mainly due to its strong recurring earnings and dividend visibility, while fleet expansion and efficiency gains are expected to provide further growth catalysts amid supportive industry conditions.
The research house has initiated coverage on Orkim with a “buy” call and a target price of RM1.14, implying a 47.9% upside from its 77 sen price, underpinned by strong recurring earnings, dividend visibility and fleet expansion.
Its valuation is based on 12 times financial year 2027 (FY27) price-to-earnings, broadly in line with weighted Malaysian marine transportation peers.
RHB Research said Orkim’s position as a leading local owner-operator of clean petroleum product (CPP) and liquefied petroleum gas tankers, coupled with its more than 50% share of Malaysia’s domestic tanker fleet, gives it an edge.
The company operates 19 vessels, with an average age of about 12 years, while fleet utilisation has remained resilient at around 90% over the past four years.
The research house expects utilisation to remain resilient despite scheduled maintenance and dry-docking of five vessels in FY26 and FY27, as the downtime will be staggered across the fleet.
In the first half of FY26, utilisation stood at 91%, while average daily charter rates rose to RM58,400 from RM54,100 a year earlier.
RHB Research expects Orkim’s core net profit to grow at a 5% compound annual growth rate over FY25 to FY28, reaching RM95mil in FY27 and RM99mil in FY28.
Earnings growth should be supported by higher daily charter rates, increased operating days and the full-year contribution from two new 14,500-deadweight tonnage CPP tankers, Orkim Jade and Orkim Ruby, which are scheduled for delivery in the first quarter of 2027.
Earnings visibility is further underpinned by 19 subsisting contracts and a RM593.2mil time-charter order book, comprising RM106.4mil of firm backlog and RM486.8mil of extension backlog.
Jade and Ruby are already contracted to Shell under three-year contracts with options to extend for a further three and two years.
