RHB maintains “buy” call on MISC but revises TP to RM8.53
MISC / graphic by MZUKRI

by BERNAMA / graphic by MZUKRI

RHB Investment Bank Bhd has maintained a ‘buy’ call on MISC Bhd with a revised target price of RM8.53 from RM8.91, reflecting weaker sentiment amidst a cautious outlook in line with industry peers.

However, RHB Investment was upbeat on the prospect of the Mero 3 project offshore Brazil, which would open up more premium floating production storage and offloading (FPSO) leasing opportunities.

“We see MISC’s recent share price weakness as an accumulation opportunity for its solid operating cash flow growth of between 10 per cent and 15 per cent in the next two years, anchored by new asset additions and decent dividend yields,” it said in a research note today.

On Mero 3 update, MISC has received more FPSO tenders subsequent to the signing of the letter of intent with Brazilian oil company Petrobras.

“The successful delivery of this project should allow it to penetrate the Americas and West Africa. Recall that Petrobras has awarded MISC the 22.5-year FPSO Mero 3 contracts. The latter identified its own VLCC, Bunga Kasturi 2, for conversion,” it said.

Previously, Petrobras has signed a letter of intent with MISC for the chartering and services of an FPSO to be deployed at the Mero 3 development offshore Brazil.

The FPSO to be named Marechal Duque de Caxias will be installed in the Mero oil field, belonging to the Libra Block, in Santos Basin pre-salt, as part of the development of the block’s southern portion, where the Mero 3 Project is located.

As at 10.19 am, MISC’s share price down 13 sen to RM6.72 with 905,100 shares traded.