PETALING JAYA: Orkim Bhd
’s earnings visibility is expected to improve following Budget 2027’s extension of the shipping tax exemption to 2036, while fleet renewal and lower financing costs can likely support its longer-term growth, according to analysts.
RHB Research maintained a “buy” recommendation on the oil and chemical tanker operator, with an unchanged target price of RM1.14, implying a potential upside of 44% from its market price of 79 sen.
The research firm also expects a dividend yield of approximately 7%.
BIMB Research likewise reiterated a “buy” call on the stock, with an unchanged discounted cash flow-derived target price of RM1.05, representing a potential upside of 32.9%.
Both research houses viewed the extension of the full income tax exemption for Malaysian shipping companies to the year of assessment 2036 as a positive development, providing greater certainty over Orkim’s after-tax earnings and reducing the risk of periodic policy changes.
BIMB Research noted that the 10-year extension – although falling short of the industry’s request for a permanent exemption – was a significant improvement over the previous arrangement, under which the incentive was renewed every two years.
“The longer tenure provides greater regulatory certainty, improves the visibility of after-tax cash flows and reduces the risk of intermittent policy uncertainty,” the research house said.
Another measure that is expected to benefit Orkim includes Budget 2027’s introduction of fixed stamp duty rates for loans financing the purchase or construction of Malaysian ships.
Under the proposal, the stamp duty will be RM2,000 for loans of up to RM100mil and RM5,000 for loans exceeding RM100mil, compared with the prevailing rate of 0.5% of the loan amount.
BIMB Research estimated that the concession could save Orkim between RM600,000 and RM700,000 on financing its two newbuild vessels, Orkim Jade and Orkim Ruby, scheduled for delivery in 2027. The savings would represent about 0.7% of its core net profit, subject to the final financing structure and eligibility requirements.
Meanwhile, RHB Research highlighted Orkim’s fleet renewal programme as another positive for its competitiveness.
The company has taken delivery of Orkim Opal, its 20th vessel, a 2025-built oil and chemical tanker with a carrying capacity of 13,998 deadweight tonnes (DWT).
The vessel increased its total fleet capacity by 5.5% to 267,034 DWT, with commercial operations and revenue contributions expected to begin by end-October.
Orkim plans to dispose of Orkim Fortune in the second half of 2026, partly offsetting the capacity addition.
Fleet renewal will continue in 2027 with the arrival of Orkim Jade and Orkim Ruby, alongside planned disposals of Orkim Express and Orkim Harmony.
RHB Research said the renewal programme was “supportive of fleet quality and longer-term competitiveness”.
It expects Orkim’s recurring net profit to rise 5.1% to RM89mil in financial year 2026 (FY26), before increasing to RM95mil in FY27.
BIMB Research projects core net profit of RM84.7mil and RM90.9mil for the respective financial years.
An analyst told StarBiz beyond fleet expansion and tax certainty, Orkim could benefit from favourable regional tanker- market dynamics.
He noted that resilient demand for refined petroleum products and fragmented trade flows were supporting vessel utilisation, while the Philippines’ increasing reliance on imported refined products was creating additional intra-Asia shipping opportunities.
“These conditions could help sustain charter demand and provide further support for Orkim’s earnings, although the outlook remains exposed to fluctuations in daily charter rates, fuel costs and geopolitical developments.”
