Journey to Wealth
MISC Berhad - Agreement With CAO Terminated
News
Last week, MISC's 45%-owned company, Centralised Terminals Sdn Bhd (CTSB) announced that it had terminated its shareholders agreement (SHA) with China Aviation Oil (Singapore) Corporation (CAO).
The remaining 55% of CTSB is owned by Dialog Group Bhd (OP, TP: RM2.79).
CTSB will own a 74% interest in LT3 with the remaining 26% by CAO. MISC's effective shareholding in LT3 is thus 33%.
Comments
We are neutral on the termination of the shareholders agreement as we have not imputed any earnings contributions from the new tank terminals from LT3. However, MISC's share price could suffer a near term negative knee-jerk reaction to the news.
To recap, in late-2011, both CTSB and CAO had entered into a SHA to undertake the construction, development and operation of a 380,000 m3 oil storage tank terminal called Langsat Terminal 3 (LT3) in Tanjung Langsat, Johor.
According to Dialog's management, the termination is mainly due to the inability of the authority of Tanjung Langsat Port (TLP) to add berths to the existing facilities for the usage of CTSB.
Although the agreement has been terminated, both parties, CTSB and CAO have agreed to continue to explore other suitable collaboration opportunities in the region.
Thus far, CTSB has completed the landfill of the site, and although the collaboration with CAO may ultimately be shelved, we believe that the excess capacity will be easily taken up given the strong demand for storage tank facilities in the region.
Outlook
Additional fleet and capacity are expected from 2H2012 onwards, which should enhance the LNG division earnings.
However, tough time remains, for the Petroleum and Chemical business due to volatile charter rates, unyielding bunker costs and the imbalance in the demand and supply of vessels.
Forecast
Maintaining our earnings estimates at this juncture as we have not imputed for any earnings contributions from the new tank terminal capacity.
Rating MAINTAIN MARKET PERFORM
Valuation Our SOP-based target price remains at RM4.66. We have stripped out the value of the assets of Petroleum and Chemical Shipping as we expect the division to remain loss-making in the near future.
Risks 1) Lower freight rates, 2) higher bunker costs and 3) further unexpected provisions from the winding up of the Liner business.
Source: Kenanga
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
2024-11-22
MISC2024-11-22
MISC2024-11-22
MISC2024-11-21
MISC2024-11-21
MISC2024-11-21
MISC2024-11-20
MISC2024-11-20
MISC2024-11-20
MISC2024-11-20
MISC2024-11-19
MISC2024-11-19
MISC2024-11-18
MISC2024-11-18
MISC2024-11-18
MISC2024-11-15
MISC2024-11-15
MISC2024-11-15
MISC2024-11-15
MISC2024-11-15
MISC2024-11-15
MISC
2024-11-15
MISC2024-11-15
MISC2024-11-14
MISC2024-11-14
MISC2024-11-14
MISC2024-11-14
MISC2024-11-14
MISC2024-11-14
MISC2024-11-13
MISC2024-11-13
MISC2024-11-13
MISC2024-11-12
MISC2024-11-12
MISC2024-11-12
MISC2024-11-12
MISCMore articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 1 of 1 comments
Post a Comment
Featured Posts
Introducing MY's First IPO Fund for Sophisticated Investors!
New Update. Discover investment communities that resonate with your ideas
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
Apps
Top Articles
1
save malaysia!
Visa-free travel to China extended for Malaysians to 30 days
2
3
Koon Yew Yin's Blog
CPO price is rising rapidly as shown by chart below - Koon Yew Yin
4
Axcapital's investment blog
KAB - Executing its way to a record quarter. Could more Petronas contracts be coming?
6
7
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
kong73
sell...
2012-08-29 16:45