(MISC MK/SELL/RM7.33/Target: RM6.30)

1Q17 core profit is deemed in line, excluding one-off gains in the offshore division. As expected, petroleum earnings were lower yoy although the group made commendable efforts to keep this division profitable. 1Q17 also saw the start of deferred income recognition from the Yemen LNG vessels, which are seen as recurring. Nevertheless, the group expects weaker 2Q17 earnings on challenges in petroleum and falling LNG rates. Maintain SELL. Target price RM6.30.

Source: UOB Kay Hian Research - 5 May 2017