KUALA LUMPUR: MISC Bhd's offshore segment is expected to benefit from a robust floating production, storage and offloading (FPSO) market outlook, supported by sustained global oil demand and concerns over underinvestment.
CIMB Securities Sdn Bhd said FPSO awards are projected to more than double by 2026, as highlighted by Rystad Energy, driven by strong project sanctioning momentum in South America, Africa and Southeast Asia.
"MISC, with its established FPSO portfolio and track record, is well placed to capture this growth, ensuring stable cash flows and strengthening earnings visibility within its 'Resilient Core' focus area as part of its three-pillar strategy," it said in a note.
CIMB Securities has maintained its "Buy" call on MISC, with an unchanged target price of RM9.19.
The firm also noted that MISC offers a decent forecast dividend yield of 4.8 per cent per annum for the financial years 2025 to 2027.
According to CIMB Securities, key re-rating catalysts for MISC include the full-year earnings contribution from FPSO Marechal Duque de Caxias starting from the financial year 2025 (FY25) onwards, alongside high utilisation rates and stable petroleum tanker time charter rates.
It added that potential synergies from a prospective merger with Bumi Armada Bhd could further strengthen MISC's position to secure large-scale FPSO contracts, supported by the favourable FPSO market outlook.
Meanwhile, CIMB Securities also highlighted that MISC had shared during its 2025 Strategic Outlook and Engagement Day that its decarbonisation strategy is progressing well, driven by clear targets, structured execution and tangible achievements across its operations and fleet renewal programmes.
The company's commitment to net-zero emissions by 2050, with interim milestones by 2030, is already showing results, with a 32 per cent reduction in total greenhouse gas (GHG) emissions, exceeding industry benchmarks.
The upcoming delivery of the world's first ammonia dual-fuel Aframax tankers marks a major step towards zero-carbon shipping, while plans to transition LNG carriers to high-efficiency dual-fuel systems by 2027 will further strengthen the company's decarbonisation pathway.
"MISC's early success in securing the world's first modular offshore substation project in the Netherlands highlights its credibility and ability to enter high-value decarbonisation segments.
"By leveraging its maritime expertise, engineering capabilities and strong financial foundation, MISC is well-positioned to execute its decarbonisation roadmap while capitalising on rising global demand for ammonia, methanol and carbon capture and storage (CCS) transport.
"This strategic pivot not only enhances the company's long-term earnings diversification and resilience but also supports its target of achieving 25 per cent revenue contribution from new energy solutions," it said.