(MISC MK/SELL/RM7.43/Target: RM6.30)

Based on crude tanker rates up till Apr 17, both spot and long-term charter rates had declined significantly yoy due to the influx of new global vessel deliveries and high refinery outages in early-17. We maintain our lower-than-consensus earnings forecasts, as the petroleum division’s performance will be the swing factor for MISC’s earnings. 1Q17 earnings are expected to be weak, in contrast to 1Q-2Q16’s where petroleum earnings were high. Maintain SELL. Target price: RM6.30.

Source: UOB Kay Hian Research - 20 Apr 2017