Broker: Maybank Research Pte Ltd
Date of Report: August 20, 2025
Marco Polo Marine: Navigating a Turnaround – Why This Offshore Marine Laggard is Set for a Breakout in 2026
Overview: A Resilient Marine Logistics Player Poised for Growth
Marco Polo Marine (MPM SP), a well-established Southeast Asian marine logistics group, is showing strong signs of recovery after a challenging period marked by lower vessel utilisation and fluctuating charter rates. Despite near-term softness, Maybank Research is maintaining a BUY recommendation, upgrading the target price to SGD0.09 from SGD0.07, reflecting a more bullish outlook for FY26E and rising peer valuations.
Key Investment Thesis: Why Marco Polo Marine Merits Attention
– **Resilient core business**: MPM charters, builds, converts, maintains, and repairs vessels, serving both oil & gas and the fast-growing offshore wind sector. – **Laggard valuation**: MPM trades at a significant discount to global and regional peers, despite a forecast FY23-26 net profit CAGR of 26.5%. – **Turnaround in sight**: The worst appears over, with longer-term charters likely to fill previous utilisation gaps, especially as new projects launch in Taiwan and the region. – **Financially robust**: The company maintains a net cash position and expects rising dividends alongside improved profitability.
Q3 FY25 Performance: Utilisation Hit, Margins Steady
MPM’s 3Q25 results showcased a mixed bag: revenues dipped due to lower vessel utilisation, but margins improved, indicating operational resilience and pricing discipline.
| Metric |
3Q25 |
2Q24 |
YoY Change |
| Revenue (SGDm) |
31.7 |
34.9 |
-9% |
| Gross Profit (SGDm) |
14.0 |
14.6 |
-4% |
| Gross Profit Margin (%) |
44% |
42% |
+2pp |
Key Details:
Revenue dropped 9% YoY to SGD31.7m due to lower utilisation (71% vs 86% a year ago), although up from 2Q’s 65%.
Ship chartering revenue fell 4% YoY to SGD22.2m, mainly from softer third-party chartering in Taiwan.
Gross margins improved to 44% from 42%, showing cost discipline and better pricing.
Upward Trajectory in Charter Rates, 2026 Looks Promising
Despite the utilisation dip, charter rates have continued rising—reflecting tight supply and growing demand from both oil & gas and offshore wind, especially with new contracts and projects in the pipeline for 2026. Management remains optimistic, expecting continued rate improvements and a rebound in utilisation as new projects (including in Taiwan and the region) come online.
Revised Earnings Outlook: Cautious for 2025, Upbeat for 2026
Maybank Research has fine-tuned its projections, trimming FY25E earnings by 6.9% due to the weaker 3Q showing but raising FY26E by 4.2% amid rising charter rates and better utilisation prospects.
| Metric |
FY25E (New) |
FY25E (Old) |
Change |
FY26E (New) |
FY26E (Old) |
Change |
| Revenue (SGDm) |
114.8 |
126.5 |
-9.3% |
144.6 |
140.2 |
+3.1% |
| Core Net Profit (SGDm) |
24.0 |
25.8 |
-6.9% |
30.2 |
29.0 |
+4.2% |
| EPS (SGD) |
0.01 |
0.01 |
-6.9% |
0.01 |
0.01 |
+4.2% |
Valuation: Deep Discount and Strong Upside Potential
– MPM’s shares trade at just 6.9x FY25E P/E, well below peers averaging 15x-25x. – Target price is raised to SGD0.09 (+36% upside from current levels), using a higher 11x FY26E P/E (previously 10x) to reflect peer re-rating.
Financial Snapshots and Key Forecasts
| FYE Sep (SGD m) |
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| Revenue |
127 |
124 |
115 |
145 |
161 |
| EBITDA |
41 |
38 |
32 |
39 |
46 |
| Core Net Profit |
23 |
22 |
24 |
30 |
36 |
| Core EPS (cts) |
0.6 |
0.6 |
0.7 |
0.8 |
1.0 |
| Core P/E (x) |
8.6 |
9.3 |
10.1 |
8.0 |
6.8 |
| Net Dividend Yield (%) |
0.0 |
1.8 |
1.5 |
1.5 |
1.5 |
| ROAE (%) |
14.7 |
12.3 |
12.2 |
13.5 |
13.9 |
Strategic Pivot: Offshore Wind a Major Growth Driver
– MPM has successfully pivoted to serve offshore windfarms in Taiwan, including a notable 3-year charter for its new Commissioning Service Operation Vessel (CSOV) with Vestas. – New CSOV is expected to drive 15-20% NPAT growth YoY in FY25E. – The company is eyeing further vessel acquisitions and shipyard expansion to capture booming regional demand for windfarm-related logistics and repair.
Shareholder Structure and Market Performance
– Major shareholders: Apricot Capital (16.2%), Penguin International (8.1%), Nautical International Holdings (3.8%). – 52-week share price range: SGD0.04 – SGD0.07. – Market cap: SGD243.1 million (USD189M). – Free float: 68.4%. – Shares outstanding: 3,683 million.
Performance Snapshot:
1-month return: +20% (absolute), +19% (relative to STI)
3-month return: +57% (absolute), +45% (relative)
12-month return: +27% (absolute), +1% (relative)
Key Strengths and Risks to Monitor
Strengths:
- Significant discount to RNAV and global peers
- Strong net cash position and robust free cash flow
- Rising charter rates and utilisation underpinning earnings growth
- Strategic repositioning to renewable energy vessels and ship repair
- Potential for higher dividends as profitability improves
Risks:
- Global recession or demand slowdown impacting charter rates
- Volatility in oil prices affecting sector sentiment
- Geopolitical risks (e.g., China-Taiwan tensions) potentially impacting regional operations
Financial Ratios and Efficiency Metrics
| Key Ratio |
FY23A |
FY24A |
FY25E |
FY26E |
FY27E |
| EBITDA Margin (%) |
32.3 |
30.6 |
28.0 |
27.2 |
28.5 |
| Net Profit Margin (%) |
17.8 |
17.6 |
20.9 |
20.9 |
22.2 |
| Current Ratio (x) |
3.3 |
2.2 |
3.8 |
4.4 |
5.2 |
| Net Gearing (%) |
net cash |
net cash |
net cash |
net cash |
net cash |
Conclusion: Marco Polo Marine – A Value-Packed Play on Offshore Logistics Recovery
Marco Polo Marine is emerging from a transition year with stronger fundamentals and a compelling growth outlook into 2026, driven by rising charter rates, a strategic pivot toward offshore renewables, and a robust financial base. Trading at a deep discount to peers and RNAV, and with strong upside potential indicated by a raised target price, MPM stands out as an attractive laggard play for investors seeking exposure to Southeast Asia’s offshore marine and renewable logistics boom.
