MISC Berhad is maintaining its disciplined, long-term growth strategy centred on stable cash flows, predictable shareholder returns and operational excellence, while stepping up capital expenditure to support fleet expansion and offshore business growth, according to CIMB Securities.
Following its MISC Up Close 2026 briefing, the research house said the shipping and energy logistics group remains committed to operating a largely contract-backed fleet to ensure earnings visibility, while selectively increasing exposure to the spot market when charter rates are favourable.
“MISC reiterated its commitment to running a steady and predictable business, underpinned by strong operational discipline and a focus on maximising asset utilisation,” CIMB Securities said.
The group intends to continue ensuring that the majority of its vessels are secured under long-term contracts, although it may opportunistically allocate more vessels to the spot market during periods of elevated freight rates to capture higher returns.
Higher capex to drive next growth phase
To support its expansion plans, MISC’s committed capital expenditure is expected to average between US$1.0 billion and US$1.2 billion annually, significantly above its historical annual spending of US$405.6 million to US$549.8 million between FY2023 and FY2025.
The investment will primarily fund new vessel deliveries and the expansion of its offshore business.
CIMB expects the capex programme to be financed mainly through operating cash flow, which is projected at US$1.1 billion to US$1.4 billion annually, broadly in line with FY2025’s US$1.4 billion.
While some offshore floating production projects may require borrowings, the research house believes MISC will remain financially disciplined to preserve its investment-grade credit ratings.
The group’s debt-to-EBITDA ratio stood at 2.9 times in FY2025, which CIMB considers manageable, and is expected to improve to between 2.7 and 2.8 times by FY2027-FY2028 as newer vessels contribute to stronger earnings.
“MISC is likely to avoid projects requiring excessive capital commitments unless it is able to recycle capital, reflecting its focus on maintaining shareholder payouts and a prudent balance sheet,” the report noted.
Buy maintained with higher target price
CIMB Securities maintained its “Buy” recommendation on MISC and raised its target price slightly to RM9.25 from RM9.19.
The research house made only marginal adjustments to its FY2026-FY2028 earnings forecasts, trimming estimates by between 0.3% and 1.6% to account for the impact of higher capital spending.
However, it expects new vessel deliveries and offshore floating production projects to contribute progressively to earnings and operating cash flow through 2030, supporting gradual improvements in dividend payouts over the longer term.
CIMB also expects FY2026 earnings to receive a boost from elevated charter rates driven by the ongoing conflict in West Asia.
Nevertheless, it cautioned that delays to global liquefied natural gas (LNG) liquefaction projects and execution risks remain the key downside risks to its outlook.
