May 18, 2010

MISC - OSK Research upgrades MISC to buy

Stock Name: MISC
Company Name: MISC BHD
Research House: OSK

KUALA LUMPUR: OSK Research has upgraded MISC to a buy at RM8.73 with target price RM10, and said it welcomed the company's decision to acquire a 50% stake in VTTI BV, which it said would provide a new income stream on top of MISC's stable tank terminal business.

"While the details are scarce, we sense a hint of synergy beyond the usual acquisition as its vendor, Vitol - a major energy trader cum explorer - may provide MISC new opportunities in businesses involving tankers, and offshore and engineering CONSTRUCTION [].

"We upgrade our call on MISC to buy with an unchanged target price of RM10 pending further details. Its fair value implies 1.7 time BV and 22 time PER on FY3/11 numbers," said the research house.

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