All Aboard: This Company's Stock +200% on Strong Chartering, Shipbuilding Orderbooks

Marco Polo Marine's (MPM) stock has had a solid run lately, up from 4.6 cents at the start of 2H2025 to 14 cents for a +200% return. Earnings for FY2025 (ended Sept) jumped 170% to S$58.5 million, helped by impairment reversals and by improved margins from higher-value ship chartering. Excluding extraordinary items, FY25 core PATMI was S$25.2m (-4% yoy) and revenues at S$122.8 m (-0.6% yoy). MPM's key attractions: • A ship chartering order book of about S$100 million spread over the next three years, backed by both oil & gas and offshore wind projects. • A S$198 million research vessel for Taiwan and its Commissioning, Service, Operation Vessel (CSOV) exposure in North Asia’s offshore wind market. • A planned Taiwan listing of its offshore wind subsidiary at the end of 2026.   Both CGS International (CGSI) and UOB Kay Hian (UOBKH) maintain a positive view of MPM:   CGS UOBKH Rating Add BUY (Maintained) Target Price 14 cts 18.8 cts Upside (from 14 cts) -- 34%

Both reports build their positive outlook on MPM's strong positioning in future growth sectors, particularly offshore wind.

CGS International (CGSI): Strong Execution and Earnings Visibility

• Business Fundamentals (Growth Drivers): CGSI highlighted MPM’s strong execution in FY25, with core profit after tax coming in ahead of expectations.
  
  This was thanks to a strong gross margin uplift in 2H and tighter operating expense controls.
  
  Future growth is expected to be driven by the full contribution of the first CSOV and the newly operational Drydock 4 in Batam in FY26F.
  
  Meghana Kande, analystNew projects, specifically a second CSOV and a large newbuild order for a research vessel (S$198m), provide earnings visibility into FY28F.
  
  
• Valuation: CGSI analysts (Meghana Kande and Lim Siew Khee) maintained an "Add" rating and a target price of S$0.14, based on 13x the forecasted earnings for FY27 (P/E).
  
  This valuation is a 40% premium over industry peers.
  
  
• Risks: These include lower-than-expected utilisation rates for the vessel fleet or the shipyard, and potential delays in offshore wind projects.
  
  

UOBKH: Momentum and High-Value Entry

• Business Fundamentals (Growth Drivers): UOBKH highlighted that MPM is moving into high-value, specialised vessel construction following the landmark S$198m oceanographic research vessel (ORV) contract win.
  
  This contract is anticipated to add approximately S$50m annually to shipyard revenue.
  
  Ship chartering revenue growth is supported by fleet expansion (new CSOV and three CTVs) and demand from the offshore oil & gas and renewable energy sectors.
  
  
• Valuation: UOBKH analysts (Heidi Mo and John Cheong) are bullish, raising their target price by 36% to S$0.188.
  
  Heidi Mo, analystThis target reflects a raised valuation peg of 20.5x their forecasted FY26 earnings (P/E).
  
  This higher P/E ratio is justified by the strong growth momentum and improved earnings visibility and the expanding footprint in growth sectors like offshore wind.
  
  
• Catalysts: UOBKH says catalysts that could drive the stock price up include higher-than-expected charter rates and new chartering contracts.
  
  

The divergence between the two broker reports lies mainly in their financial assumptions about future margins and how aggressively they value the stock.

1. Differences in Earnings and Growth Assumptions

UOBKH assumes a stronger and earlier margin improvement than CGSI:

• CGSI’s Margin Outlook: CGSI projects that the strong gross margin achieved in 2HFY25 may normalise to 36-43% over FY26F-28F.
  
  This is because the new CSOV will transition from a high day rate (c.US$65k) to a lower long-term charter rate (c.US$45k), and new shipbuilding projects typically carry lower margins initially.
  
  
• UOBKH’s Margin Outlook: UOBKH raised its FY26/FY27 earnings forecasts by 7% and 2% respectively, specifically due to a "stronger margin outlook" and an earlier ramp-up in shipyard activity.
  
  This belief in margin expansion come from the high-value nature of the new ORV contract.
  
  
• Discrepancy: This difference in margin outlook translates to different profitability forecasts.
  
  UOBKH forecasts net profit of S$34.3m for FY26F, which is higher than CGSI's S$31.83m.
  
  

2. Difference in Valuation

• CGSI’s Valuation: Values the stock at 13x projected FY27 earnings.
  
  
• UOBKH’s Valuation: Values the stock at 20.5x (previously 16x) projected FY26 earnings.
  
  
  

→ See the CGS and UOB KH reports.

→ See also: DBS Research initiates coverage, calling company an "Undervalued Gem, Ready to Set Sail"