Kenanga Research expects Keyfield International Bhd to deliver a stronger second half of 2026 as vessel utilisation improves, while arguing that the market is undervaluing the offshore support vessel operator relative to the potential realisable value of its fleet.
The research house maintained its OUTPERFORM call and target price of RM1.88, based on an unchanged 11 times FY27 forecast price-to-earnings multiple, which it regards as appropriate for an early-cycle upstream services company.
Kenanga said Keyfield may initially appear expensive on a conventional price-to-book basis, with the stock trading at around 1.4 times FY26 forecast book value compared with peers valued below book.
However, it said a market-based assessment of the group’s vessels paints a different picture. By benchmarking Keyfield’s fleet against recent vessel transactions, Kenanga estimated a potential realisable value of about RM1.4 billion, compared with property, plant and equipment value of around RM962 million, including RM100 million attributed to its new dredger.
On that basis, Kenanga estimates that the market is pricing Keyfield at about a 29.2% discount to the realisable value of its fleet alone.
The research house described this as a conservative valuation measure approaching a potential liquidation value, without taking into account the ongoing cash flows generated from vessel charters.
Kenanga believes the current share price is therefore placing excessive emphasis on Keyfield’s present earnings downcycle.
It also noted that the group acquired a large portion of its fleet during distressed market conditions between 2021 and 2023, which enabled it to purchase vessels at relatively low valuations and created a margin of safety in the asset base.
Based on Kenanga’s FY26 earnings forecast of RM72 million, the group would take about 12 years to generate cumulative earnings equivalent to the current PPE value, which the research house said further supports its view that the fleet valuation provides downside protection.
Utilisation Expected To Improve In 2H26
Operationally, Kenanga expects vessel utilisation to improve in the second half after several vessels spent part of 1H26 transitioning between charters. First-half utilisation stood at 52.6%.
Based on charters already announced and the group’s contract pipeline, the research house expects utilisation to be higher year-on-year in both the third and fourth quarters, with the strongest improvement anticipated in 4Q26 following weak charter demand in the corresponding period last year.
There is also potential upside that is not incorporated into Kenanga’s current target price.
Keyfield is scheduled to take delivery of one DP2 accommodation work barge and two 90-tonne DP2 anchor-handling tug supply vessels in 2028, while Kenanga has only assumed one quarter of contribution from its new dredger in FY27.
The research house said Keyfield remains attractive because of the timing of its fleet acquisitions during the Covid-era downturn, the potential for a dividend payout ratio above 40%, and its relatively young fleet, which could position the group to benefit from any recovery in upstream oil and gas capital expenditure.
