Date of Report
September 30, 2024
Broker Name
CGS International Securities
Company Overview
Mermaid Maritime (MMT) is a Singapore-based offshore service provider specializing in subsea and related services. The company operates with a diverse fleet and serves global oil and gas clients through projects related to installation, maintenance, and decommissioning of subsea structures.
Orderbook and Market Position
- Orderbook (OB): As of the second quarter of 2024, Mermaid Maritime’s orderbook reached an 11-year high, standing at US$976 million. This surge is driven by new decommissioning orders and the renewal of Inspection, Repair, and Maintenance (IRM) contracts at higher values.
- Fleet Utilization: Global vessel supply has been tight due to limited newbuilds over the last decade. As a result, Mermaid Maritime’s fleet utilization increased to over 80% in the first half of 2024, a significant jump from 50% in 2021.
Profit Growth Outlook
- Net Profit Growth: The company is projected to achieve impressive net profit growth of 22% in FY2024 and 70% in FY2025. This growth is attributed to the execution of larger-scale decommissioning projects and high-margin cable-lay orders.
- Valuation: Mermaid Maritime trades at a 33% discount to its global peers’ 2025 forward Price-to-Earnings (P/E) ratio.
Analyst Call and Target Price
CGS International initiates coverage on Mermaid Maritime with an Add call. The target price is set at S$0.20, based on an 11x 2025 forward P/E.
All information is based on the CGS International report dated September 30, 2024.
