Minimal impact likely on MISC from latest Gulf war developments

PETALING JAYA: MISC Bhd’s long-term strategy is not affected by the recent geopolitical developments and is supported by elevated tanker rates and liquefied natural gas (LNG) businesses.

RHB Research said the management’s comments were broadly in line with its expectations, following the recent MISC Up Close 2026 event.

This has led to no changes to the research house’s investment thesis.

“Management reiterated that recent geopolitical developments have not altered its long-term strategy, with investment decisions continuing to be driven by long-term market fundamentals.

“MISC will also maintain its portfolio mix of approximately 80% long-term contracted assets and 20% spot market exposure to balance earnings visibility with upside from stronger spot markets,” the research house said in a report recently.

RHB Research said MISC expects tanker rates to remain elevated.

This will be supported by longer voyage distances and higher tonne-mile demand, although the initial spike following the Middle East conflict has largely been priced in.

“LNG remains MISC’s key growth pillar, with 19 LNG carriers scheduled for delivery and the gas segment expected to become comparable to petroleum in revenue contribution by 2030,” the research house said.

RHB Research said MISC expects to sustain annual capital expenditure of about US$1bil through 2030, while reiterating its disciplined investment approach.

“Management also remains optimistic on the floating production, storage and offloading or FPSO market beyond 2030 and continues to explore both organic growth and partnership opportunities.

“This is following the termination of the proposed Bumi Armada merger,” the research house said.

RHB Research said management continues to explore monetisation of selected offshore assets, including Mero 3.

This will be subject to acceptable valuations.

MISC also expects financial year 2026 (FY26) LNG impairment charges to be significantly lower than FY24 to FY25 and reiterated its commitment to delivering consistent and progressive dividends, added the research house.

RHB Research maintained its “buy” call on MISC with the sum of parts-based target price of RM9.71.

The research house said this represents a 22% upside and about 5% yield.

The key risks for MISC include higher vessel operating costs, contract terminations, and regulatory issues.

Meanwhile, AmInvestment Bank Research said it came away from the group’s recent investor day 2026 more constructive, with greater conviction in the group’s multi-year earnings trajectory and cash-flow resilience.

The research house said it forecast a three-year earnings compound annual growth rate (CAGR) of 12%.

This will be driven by 19 asset additions and stronger contributions from fully-owned LNG carriers, complemented by tanker upside and a growing offshore pipeline.

AmInvestment Bank Research said petroleum drives near-term upside for MISC and offshore provides the next growth leg.

“Very large crude carrier rates rose sharply again in late June, while Suezmax rates continued to climb and Aframax rates stabilised above earlier averages.

“MISC is positioned to capture this strength through its about 30% spot exposure and market-linked contract provisions, while minimum-rate floors within its about 70% term portfolio provide downside protection.

“Prolonged trade disruptions and longer sailing distances have tightened vessel availability, helping to keep rates elevated.

“Beyond petroleum, offshore growth is supported by a 4.5% CAGR in ultra-deepwater production over 2026 to 2030, with 11 FPSO awards in 2026 (remaining five to be awarded), nine in 2027,” the research house said.

AmInvestment Bank Research said 19 assets will enter the fleet for gas, with incremental uplift from seven fully owned LNG carrier (LNGC) deliveries in 2026 to 2028, versus only 12 joint venture vessels delivered year-to-date.

“Beyond the current delivery wave, LNGC ordering slows materially while newbuild prices have risen to US$244mil, supporting future charter renewals, raising barriers to entry and strengthening the replacement value.

“Impairment concerns also appear overdone, with risk increasingly ring-fenced to older steam-turbine tonnage.

“Rising Asian interest in regional LNG adds visibility for LNG shipping demand,” the research house said.

AmInvestment Bank Research maintained a “buy” call on MISC with a target price of RM9.50.