PETALING JAYA: Anticipation of a greater yr forward for crude oil tankers can be a boon for MISC Bhda supplier of worldwide energy-related maritime options and providers.
CGS-CIMB Analysis in its newest report mentioned potential re-rating catalysts for MISC included a powerful restoration within the crude tanker freight charges this yr. That is on condition that the Group of the Petroleum Exporting Nations and its allies (Opec+) and non-Opec nations are prone to elevate output in 2022 on the again of very sturdy value stimulus, it famous.
“China might also import extra crude this yr, Iran could re-enter the export markets if it involves an settlement with the USA on its nuclear programme, and the probability that Europe will import crude oil from extra distant sources as an alternative from Russia.
“This might additionally elevate the annual tonne-mile demand for tankers for the primary time after three consecutive annual declines,” added CGS-CIMB Analysis.
Moreover, the reopening of Malaysia’s worldwide borders on April 1 might additionally assist enhance the marine service and restore volumes of MISC’s unit, Malaysia Marine and Heavy Engineering Holdings Bhd shipyard.
For these causes, the analysis home has repeated an “add” name on MISC with the next goal value of RM8.36.
“Our goal value has been elevated from RM8.23 beforehand, as a result of we now assume that second-hand liquidation values of the crude tanker fleet at end-2022 can be 20% greater than the values prevailing at end-2021, from 10% beforehand .
“It’s because crude tanker second-hand liquidation values in early-April have already appreciated by 10% towards end-2021 values,” defined CGS-CIMB Analysis.
The analysis home additionally expects the second-hand tanker values to proceed rising, “as we’re bullish on crude tanker freight charges for the remainder of this yr”.
In the meantime, MISC can also be engaged on a number of floating manufacturing, storage and offloading (FPSO) and liquefied pure gasoline (LNG) delivery tenders.
“The purchasers could award the time constitution contracts in 2022 with the potential Atlantic Basin FPSO contract involving a capital expenditure of US$1bil to US$2bil (RM4.2bil to RM8.5bil),” the analysis home mentioned.
As FPSO contractors are at the moment very busy, MISC expects a suppliers’ market and higher pricing energy. MISC can also be planning to take part in bids for varied LNG and ethane provider time constitution contracts.