Fleet expansion to fuel Orkim’s prospects

By the Editorial Team · Tuesday, October 6, 2026

RHB Research has initiated coverage on Orkim Bhd with a “buy” rating and a target price of RM1.14, citing fleet expansion and strong recurring earnings as growth drivers. The company's dominant market position, ongoing contracts worth RM593.2 million, and new tankers secured under multi-year Shell contracts underpin a projected 5% annual net profit growth through 2028.

Orkim Bhd is poised for growth fueled by fleet expansion and strong recurring earnings, according to RHB Research, which has initiated coverage on the Malaysian marine transportation company with a “buy” rating and a target price of RM1.14, representing an upside of nearly 48% from its current share price of 77 sen.

RHB Research highlights Orkim’s dominant position in the local market as a key advantage. The company is a leading owner-operator of clean petroleum product (CPP) and liquefied petroleum gas (LPG) tankers in Malaysia, holding over 50% of the domestic tanker fleet. Orkim operates 19 vessels with an average age of approximately 12 years and has maintained robust fleet utilization of around 90% over the past four years. Utilization stood at 91% in the first half of fiscal year 2026 (FY26), while average daily charter rates increased to RM58,400 from RM54,100 a year earlier.

Despite planned maintenance and dry-docking for five vessels across FY26 and FY27, RHB Research expects fleet utilization to remain resilient due to staggered downtime. The firm projects a compound annual growth rate of 5% in Orkim’s core net profit from FY25 to FY28, anticipating earnings to reach RM95 million in FY27 and RM99 million in FY28.

The growth outlook is supported by rising daily charter rates, increased operating days, and the full-year contributions from two new 14,500-deadweight tonnage CPP tankers—Orkim Jade and Orkim Ruby—expected to be delivered in the first quarter of 2027. These vessels are already secured under three-year contracts with Shell, each with options to extend service by an additional two to three years.

Orkim’s earnings visibility is reinforced by 19 ongoing contracts and a time-charter order book valued at RM593.2 million, which includes RM106.4 million in firm backlog and RM486.8 million in extension backlog. Valued at 12 times projected FY27 price-to-earnings, the company’s valuation aligns closely with weighted peers in the Malaysian marine transportation sector.

Overall, RHB Research views Orkim’s expanding fleet, operational stability, and contract backlog as key growth catalysts amid favorable industry conditions.

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