KUALA LUMPUR: Orkim Bhd has taken delivery of its 21st vessel, MT Orkim Jade, ahead of schedule, a development expected to bring forward its earnings contribution and strengthen revenue visibility, according to RHB Research.
The 2026-built clean petroleum products tanker has a carrying capacity of 14,500 deadweight tonnes (DWT), lifting Orkim’s total fleet capacity by 5.4 per cent to 281,534 DWT.
The vessel is expected to begin commercial operations this month, supported by a long-term consecutive voyage charter with Shell Malaysia.
RHB maintained its “Buy” recommendation on Orkim with an unchanged target price of RM1.14, implying a potential upside of 46 per cent from its market price of 78 sen, alongside an estimated dividend yield of seven per cent.
“The early delivery is positive, bringing forward earnings contribution and providing greater earnings visibility,” the research firm said.
RHB added that Orkim aims to add another five vessels between 2027 and 2029 as part of its fleet rejuvenation programme, which is expected to improve vessel quality, operational efficiency and long-term competitiveness.
Orkim remains on track to dispose of Orkim Fortune in the second half of 2026, which would bring its fleet capacity to about 274,200 DWT by year-end, followed by the expected delivery of Orkim Ruby in 2027.
These additions will be partly offset by the planned disposals of Orkim Express and Orkim Harmony in the first half of 2027, estimated to fetch RM20.8 million and RM13.4 million respectively.
Following the disposals, fleet capacity is expected to stand at about 273,400 DWT across 19 vessels by end of the financial year 2027 (FY27), before increasing to 20 vessels in FY28 and 21 vessels in FY29.
Separately, Apex Securities initiated coverage on Orkim with a “Buy” recommendation and a target price of RM1.26, representing a potential capital upside of 57.5 per cent, including an estimated FY27 dividend yield of 7.1 per cent.
Apex said the group’s fleet renewal programme would help address concerns over its ageing vessels, with a sizeable portion of the existing fleet approaching 20 years of age.
It noted that the recent additions of Orkim Garnet, delivered in May 2026, and Orkim Opal, which began commercial operations in October 2026, had partly mitigated these concerns.
Together with the anticipated deliveries of Orkim Jade and Orkim Ruby, Apex expects the group’s fleet capacity to reach about 273,000 DWT by end-2027, after accounting for planned vessel disposals.
On the tax front, both research firms highlighted the extension of the shipping income tax exemption under Budget 2027 as a positive development for Orkim’s earnings visibility.
RHB said the extension provided greater clarity on the group’s tax outlook, removing uncertainty surrounding the continuation of the incentive.
It expects Orkim’s effective tax rate to remain at about two per cent, subject to continued compliance with the relevant eligibility requirements.
Meanwhile, Apex said; “Orkim’s tax exemption on shipping income was initially scheduled to lapse after the year of assessment 2026 (YA2026), potentially subjecting a large portion of its shipping earnings to the statutory tax rate of 24 per cent.
“However, we believe the full income tax exemption announced under Budget 2027 effectively removes this earnings overhang, providing greater earnings visibility moving forward,” it added.
It expects the group to maintain an effective tax rate of about one per cent following the extension.
Apex also highlighted Orkim’s long-term charter agreements as a buffer against elevated fuel costs amid the Middle East conflict.
It said contractual arrangements, including time charters where charterers bear bunker costs and consecutive voyage charters and contracts of affreightment that allow monthly bunker cost adjustments, helped protect the group’s earnings from rising fuel expenses.
The research firm added that Orkim could benefit from higher daily charter rates when existing contracts are renewed or extended, although its long-term charter profile also limits immediate exposure to prevailing freight rates.
RHB made no changes to its earnings forecasts, projecting recurring net profit of RM89 million for FY26, RM95 million for FY27 and RM99 million for FY28.
Apex, meanwhile, based its RM1.26 target price on a discounted cash flow valuation, using a weighted average cost of capital of 7.9 per cent and a terminal growth rate of two per cent.
Among the key risks identified by RHB were weaker demand for refinery products, piracy and armed robbery, lower daily charter rates, unscheduled maintenance, higher repair costs and geopolitical conflicts.
Apex also flagged customer concentration involving Petroliam Nasional Bhd and Shell, charter-rate and vessel utilisation risks as the tanker market normalises, delivery and funding risks associated with the fleet renewal programme, and potential policy changes to the shipping tax exemption beyond YA2036.