MISC LNG Contracts and Fleet Renewal to Shield Earnings
MISC Bhd's long-term liquefied natural gas contracts and fleet renewal program are expected to shield earnings from rate swings, according to Hong Leong Investment Bank.
Analyst Thye May Ting noted that MISC has increased the proportion of its gas segment exposed to term contracts to 98% in FY25, up from 83% in FY24 and 89% in FY23.
This provides stable earnings insulated from spot rate fluctuations, she said.
The company operates a gas fleet of 39 vessels comprising 30 LNG carriers, three floating storage units, and six very large ethane carriers. By 2030, the fleet is targeted to expand to 50 vessels with the addition of 14 LNG carriers, two VLECs, one floating storage and regasification unit, and two liquefied carbon dioxide carriers.
MISC's petroleum business is positioned to benefit from stronger tanker rates, with its petroleum shipping arm AET maintaining a 70:30 term-to-spot portfolio. HLIB maintained its 'Buy' call on MISC with an unchanged target price of RM9.04.