Maybank Investment Bank Bhd (Maybank IB) changed its recommendation to ‘buy’ from ‘hold’ on MISC Bhd following the expected increase in earnings in the first quarter ended 31 March 2021.
In a research note today, Maybank IB said that through higher oil supply from the Organization of Petroleum Exporting Countries and its allies (OPEC +) and Libya, it was confident that tank rates would increase gradually from the first quarter of 2021.
"Apart from being contributed by six large-scale ethane transport vessels, MISC's first quarter revenue for 2021 will improve quarterly," he said as reported by Bernama.
In addition, Maybank IB said MISC-related party transactions with Petronas would decline in the future as external contracts contributed greater than the financial year 2021.
The research firm said petroleum tank rates declined 45% quarter-on-quarter due to sluggish oil demand and reduced floating savings could lead to lower fourth quarter 2020 results.
However, Maybank IB maintained the MISC target price at RM7.75.
At 12.04pm, MISC shares on Bursa Malaysia fell 17 sen to RM6.55 with 957,900 shares changing hands.
