• So the takeover offer price for Dyna-Mac has just been raised to 67 cents/share by Hanwha Ocean. It is a strategic move to capitalize on the growing demand in the offshore and marine industry, particularly for FPSOs (Floating Production, Storage, and Offloading units).  Photo: Marco Polo• Earlier, another Singapore listco, Atlantic Navigation, recently received a US$183 million offer to buy its fleet of offshore support vessels.• The spotlight will increase on other industry players. One of them is Marco Polo Marine, which has been expanding its fleet to support offshore wind projects and is constructing new vessels to meet this demand. • Meanwhile, it is enjoying buoyant charter rates due to an industry shortage of vessels (owing to lack of an appetite by banks to finance newbuilds) while demand is strong. • Another Singapore listed vessel owner, serving the oil & gas industry, is Nam Cheong, which trades at around 3.5X this year's expected earnings. (See: NAM CHEONG: Jumps 100+% in 2 months as 1H results point to low valuation) Read Maybank KE's latest take on Marco Polo below .... |
Excerpts from Maybank KE report
Analyst: Jarick Seet
Marco Polo Marine (MPM SP) -- Beneficiary of rising oil prices
| Maintain BUY with a TP of SGD0.08 |
With oil prices rising, we expect charter rates to continue to rise in the near term and utilisation across MPM’s vessels likely to remain high.
We also believe that its current valuation at 6.6x* FY25E P/E is attractive as CSOV and CTV earnings should kick from FY25E. |
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* Stock price at the time of Maybank report was 6 cents, while now it's 5.4 cents.
Repair volumes likely to surge in FY25
There were fewer 3rd-party repair works in 3QFY24 as one of MPM’s dry docks was occupied by its CSOV, construction of which has been delayed.
This also caused a shortage of staff to work on 3rd-party repairs.
As a result, this is likely to affect 2HFY24 profit.
But we expect these issues to have been resolved by end-FY24E in Sep’24.
FY25E should see a full ramp up of ship-repair volumes, driven by expansion of its 4th dry dock, which could see revenue rise 25% (with revenue recognition from Apr-25 onwards).
CTV fleet – a new growth segment
MPM’s subsidiary, PKR Offshore, in Taiwan has contracted to charter CTVs in APAC to support windfarm customer Siemens Gamesa’s offshore wind projects in Taiwan and South Korea.
We expect MPM to start supplying 2 CTVs by end-2024, rising to a fleet of 10-15 CTVs within 4-5 years.
MPM will also increase its fleet of anchor handlers, which could be used for the O&G and windfarm projects.
We also expect more shipbuilding jobs for offshore vessels for other customers in FY25E.
We also expect FY24 earnings to be in-line with our projections. |
Full report here
