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Hong Leong IB upgrades MISC to Hold, target price RM6.32

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Hong Leong IB upgrades MISC to Hold, target price RM6.32 Empty Hong Leong IB upgrades MISC to Hold, target price RM6.32

Post by Cals Mon 12 May 2014, 11:04

Hong Leong IB upgrades MISC to Hold, target price RM6.32
Business & Markets 2014
Written by theedgemalaysia.com   
Monday, 12 May 2014 08:40

KUALA LUMPUR (May 12): Hong Leong IB Research has upgraded MISC Bhd to a Hold with an unchanged target price of RM6.32 and said the company reported 1Q14 core net profit of RM486.4 million, in line with house and consensus estimate achieving 27.0% and 28.75 respectively.
In a note Monday, the research house said the strong 1Q14 was driven by seasonally strong charter rate for Petroleum tankers.
However, it said the rates had normalised since March and MISC guided for potential losses for the division for the remaining quarters.
HLIB  advised investors to expect lumpy earnings recognition (finance lease) when FPSO Cendor commences operation in2H14, which is likely to offset the impairment charges on 5 Puteri Class LNG tankers.
“Cash proceeds from the listing of parts of MISC assets in US by 2H14, will be distributed back to shareholder MISC and Vitol.
“Gains of RM50 million from the disposal of MILS is expected to be recognized by 3Q14.
“We upgraded MISC to Hold with unchanged target price of RM6.32 (based on SOP), in view of the share price retracement. However, we do not foresee significant near term catalyst for MISC,” it said.
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