KUALA LUMPUR (Feb 13): CIMB Investment Bank Bhd lowered its target price for MISC Bhd shares to RM6.36 from RM6.42 previously after the shipping firm reported a 30% drop in fourth quarter net profit from a year earlier.

On Friday, MISC said net profit fell to RM529.83 million in the fourth quarter ended Dec 31, 2016 from RM752.72 million. For the full year, net profit was higher at RM2.58 billion versus RM2.47 billion a year earlier.

Today, CIMB analyst Raymond Yap wrote in a note: "Our target price is based on a 25% discount to sum-of-parts (SOP) in view of the weak fundamentals expected to prevail throughout this year."

"Crude tanker spot rates weakened in January after seasonal 4Q16 strength, and we believe the weakness will continue on heavy newbuilding deliveries, and the rise in oil prices and cuts in OPEC/non-OPEC output that would reduce shipping volumes," Yap said.

He maintained CIMB's "reduce" call on MISC shares.