PETALING JAYA: Lianson Fleet Group Bhd’s (LFG) purchase of bulk carrier LFG Cengal for RM93.9mil supports the company’s business model pivot from the offshore support vessel (OSV) market.
Kenanga Research noted the Japanese-built Ultramax bulk carrier (2013-built, 61,446-tonne deadweight tonnage) was fairly priced and will support LFG’s strategy to earn more stable, recurring revenues.
“The bulk carrier will be on an eight-year charter to its shareholder (Liannex Corp) and LFG will not be exposed to the volatility of the spot market during the whole of its charter, consistent with the group’s strategy of refocusing its vessel portfolio on bulk carriers,” the research house stated in a report on the shipping group.
In light of the new earnings contribution from LFG Cengal, Kenanga Research maintained the net profit forecast of RM61.6mil for LFG’s financial year 2026 (FY26), but lifted its FY27 earnings forecast by 5% to RM105.2mil.
Consequently, the research house raised its sum-of-parts-derived target price for LFG by 4% to RM1.59 a share from RM1.54 previously, and maintained a “market perform” rating on the stock.
“We like LFG due to the recycling of capital from selling OSV vessels at a favourable pricing; the venture into asset-light drilling business with huge potential due to the lack of local competitors; and a potential Asean Power Grid beneficiary with the group’s intention.”
However, it noted LFG’s drilling and cable business ventures have yet to see any progress to date, and there is a risk of further delay of potential earnings.
For its second quarter ended June 30, 2026, LFG’s net profit rose to RM29.19mil from RM27.22mil in the previous corresponding period, while revenue grew to RM74.25mil from RM64.73mil a year earlier.
In a note accompanying its latest financial results, the company further stated that the operating outlook for the offshore and marine services sector remains supported by ongoing upstream activities and regional demand, despite global energy market volatility and geopolitical uncertainties.
“The group’s diversified OSV and marine transportation portfolio broadens its earnings base and supports growth opportunities across its regional markets,” the research house said.
“During the financial period, the group continued to optimise its fleet portfolio through strategic vessel acquisitions and disposals, in line with its objective of maintaining an efficient and commercially competitive fleet.”
As at June 30, 2026, the group’s order book stood at RM927.3mil, of which approximately 83% is secured under long-term contracts, providing earnings visibility and supporting cash flow stability in the coming periods.
“Barring any unforeseen circumstances and subject to prevailing market conditions, the board endeavours to deliver satisfactory performance for the financial year,” said the company.
