AmInvest Research Reports

MISC - Fleet Renewal and Zero-carbon Vessels

AmInvest
Publish date: Fri, 01 Dec 2023, 10:29 AM
AmInvest
0 8,558
An official blog in I3investor to publish research reports provided by AmInvest research team.

All materials published here are prepared by AmInvest. For latest offers on AmInvest trading products and news, please refer to: https://www.aminvest.com/eng/Pages/home.aspx

Tel: +603 2036 1800 / +603 2032 2888
Fax: +603 2031 5210
Email: enquiries@aminvest.com

Office Hours
Monday to Thursday: 8:45am – 5:45pm
Friday: 8:45am – 5:00pm
(GMT +08:00 Malaysia)

Investment Highlights

  • We maintain HOLD on MISC with an unchanged sum-ofparts-derived fair value of RM7.81/share (Exhibit 6) which implies an FY24F EV/EBITDA of 8.4x, slightly below its 3- year average of 9x.
  • Our FV incorporates a 3% premium to reflect our 4-star ESG rating, premised on the group’s ongoing sustainability initiatives (Exhibit 9).
  • MISC held a closed-door session with analysts to share on ongoing sustainability initiatives that was attended by Raja Azlan (Vice President of Finance & Corporate Planning), Captain Raja Sager (Vice President, Group HSSE & Sustainability) and Ausmal Kardin (Vice President of Legal, Corporate Secretarial & Compliance).
  • We note the importance of shipping to the global trade environment and the continued role that it is expected to play as the most carbon-efficient mode of freight transportation in the future.
  • The group has set an ambitious target of 50% reduction in greenhouse gas emissions (GHG) by 2030 and net zero carbon by 2050, a 10% rise when compared to the international benchmark set by the International Maritime Organisation (IMO)
  • We highlight 2 key initiatives in our view which is crucial and material to the group’s shipping operation: (i) greening of its fleet through renewal plans and voyage planning; and (ii) deployment of zero-carbon (ammonia) vessels by 2030.
  • We believe the group’s ongoing efforts to realign its shipping operation to the requirements of a low carbon environment in the future is crucial to its medium-term and long-term prospects.
  • We find the ongoing efforts as reaffirming our existing 4- star ESG rating on the company, which affords the group a 3% premium to our fair value.
  • MISC appears fairly valued at a current FY24F EV/EBITDA of 8.8x, close to its 3-year average of 9x.

Source: AmInvest Research - 1 Dec 2023

Related Stocks
Discussions
Be the first to like this. Showing 0 of 0 comments

Post a Comment