Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) is beginning to reap the benefits of Petronas’ enterprise-wide collaboration strategy, strengthening MISC Bhd’s position to capture growing opportunities in the global floating production market, according to CIMB Research.
Following MHB’s Stakeholders Day, the research house said the most tangible outcome of the enterprise synergy initiative was the successful joint award of two floating production projects — FSO Santos and FPU Kelidang — through Floating Production Solutions (FPS), a joint venture between MHB and MISC’s Offshore Business Unit (OBU).
The collaboration combines OBU’s expertise in project development, operations and maintenance with MHB’s fabrication yard capacity and execution capabilities for floater conversion works, allowing the group to bid more competitively for large offshore energy projects.
CIMB believes the partnership positions MISC to benefit from the ongoing global floater investment cycle and expects more joint bids between the two entities going forward.
Among the potential projects on the horizon is Petronas’ long-delayed FPSO Limbayong, which remains available in the domestic market.
Marine business turnaround gathers pace
Beyond the offshore segment, MHB is also seeking to build on the operational improvements achieved by its marine repair and maintenance division.
The company delivered 87 vessels in 2025, including a record 26 liquefied natural gas (LNG) carriers, marking one of its strongest performances in recent years.
Average turnaround time has also improved significantly, falling to 15 to 16 days from approximately 24 to 25 days previously, driven by better yard planning, workflow optimisation and stronger project execution discipline.
The improvements have enabled MHB to diversify its customer base, securing both new and repeat business from international shipowners while rebuilding customer confidence following delivery challenges experienced between 2020 and 2022.
CIMB noted that with several vessel conversion projects currently in the pipeline, MHB may eventually need to invest further in yard modernisation and automation to sustain higher productivity while supporting increasing marine repair activity.
Positive outlook for MISC
Although MHB currently contributes less than 5% of MISC’s FY2025 operating profit, CIMB said the company’s operational turnaround and the success of the enterprise synergy strategy have significantly reduced the risk of MHB weighing on the group’s overall earnings.
The research house maintained its “Buy” recommendation on MISC with an unchanged target price of RM9.19.
It said MISC remains well positioned to benefit from the global floater upcycle, supported by improving execution capabilities, expanding offshore opportunities and ongoing fleet rejuvenation initiatives that are expected to underpin long-term earnings growth.
CIMB added that the strengthening partnership between MHB and MISC’s Offshore Business Unit demonstrates the effectiveness of Petronas’ enterprise synergy strategy, which was introduced in early 2025 to improve collaboration across its group of companies and enhance competitiveness in securing large-scale energy projects.
