KUALA LUMPUR (April 3): MTT Shipping and Logistics Bhd, a container liner operator en route to a Main Market listing, has been assigned a fair value of RM1.23 by Public Investment Bank, implying an 18.9% upside from its initial public offering (IPO) price of RM1.03.
In an IPO note on Friday, PublicInvest said the valuation was based on a 10 times price-earnings multiple pegged to MTT Shipping’s forecast FY2027 earnings per share, supported by the group’s market leadership, younger fleet, and stronger margins.
The container liner operator commands a 46% market share of cabotage volumes on West Malaysia to East Malaysia routes by providing container liner, vessel chartering, and container storage services with 26 vessels and 11 chartered-out vessels.
Financially, MTT Shipping’s revenue declined from RM1.41 billion in the financial year ended Dec 31, 2022 (FY2022) to RM1.20 billion in FY2024, as the average freight rate fell from RM2,932 in 2022 to RM1,888 in 2024.
The research house expects earnings to continue expanding, forecasting a three-year earnings compound annual growth rate of 6.9% with net profit reaching RM310 million in FY2027, driven by improving margins and key strategies implemented by the group, such as effective space and capacity management and custom-designed newbuilds for specific routes.
The group is expanding its logistics and shipping operations by developing integrated freight facilities in Kota Kinabalu, Kuching, and Bintulu to address infrastructure gaps, support fast-moving consumer goods, consumer electronics, and cold-chain cargo, and drive incremental cargo intake onto its vessels.
It is also entering the chemical shipping market with two new chemical tankers in 2026 to participate in transporting non-hazardous and hazardous bulk liquid cargoes.
Additionally, it is acquiring additional container vessels to grow domestic and international liner operations, including Southeast Asia, the Indian subcontinent, and South China, to expand containerised automotive shipping, and to increase its container depot capacity in Pulau Indah, Kuching, and Bintulu.
About 95.7% of the RM652 million MTT Shipping is raising will be channelled towards the acquisition of at least 12 newbuild container vessels, in line with the group’s strategy to expand capacity and strengthen its network coverage. The remaining funds will be utilised for listing-related expenses.
Still, PublicInvest flagged key risks, including industrial cyclicality; operational and fleet risks; changing trade patterns, which may lead to container repositioning costs; and changes to the current taxation regime, which could affect earnings.
MTT Shipping is scheduled for listing on Bursa Malaysia’s Main Market on April 21, with an enlarged market capitalisation of RM2.58 billion based on the IPO price.
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