Broker: Maybank Research Pte Ltd
Date of Report: August 20, 2025

Marco Polo Marine: Poised for Recovery with Stronger FY26 Outlook – Full Financial Analysis and Outlook

Executive Summary: Why Marco Polo Marine Remains a Compelling SMID Laggard Play

Marco Polo Marine (MPM SP), a reputable Southeast Asian marine logistics operator, is showing signs of resilience and recovery despite recent headwinds. Maybank Research maintains its BUY call, raising the target price to SGD0.09 (from SGD0.07), reflecting optimism for FY26 and beyond. While 3Q25 results showed year-on-year softness due to lower vessel utilization, improving gross margins, rising charter rates, and a robust pipeline for offshore wind farm projects suggest that the worst is over. MPM is expected to benefit from industry tailwinds, especially as new renewable energy projects commence across Taiwan and the region.

Company Snapshot: Marco Polo Marine at a Glance

– **Sector:** Logistics, Marine Services – **Market Cap:** SGD243.1 million – **Issued Shares:** 3,683 million – **Free Float:** 68.4% – **Major Shareholders:** Apricot Capital (16.2%), Penguin International (8.1%), Nautical International Holdings (3.8%) – **Business:** Chartering, building, conversion, maintenance, and repair of vessels across Southeast Asia.

Investment Highlights

• 3Q25 revenue was down 9% YoY but showed sequential improvement in gross profit margin (44% vs 42%).
• Utilization rates dipped to 71% (from 86% YoY) but bounced from 2Q’s 65%.
• Charter rates are rising, management expects further improvement in utilization and demand from both oil & gas (O&G) and offshore wind projects.
• FY26 is projected to be much stronger, driven by longer-term charters and new projects in Taiwan and other regional markets.
• Valuation uplift: Target price lifted to SGD0.09, based on 11x FY26E P/E (previously 10x), reflecting higher sector valuations.
• Strong net cash position and significant discount to RNAV make MPM a potential laggard catch-up play.

Financial Performance Review: 3Q25 and Earnings Trends

3Q25 revenues declined year-on-year, primarily due to lower third-party chartering from Taiwan and utilization rates falling to 71% (vs 86% YoY). However, this was an improvement from 2Q’s 65%, and management expects further stabilization or an uptick in 4Q.
Gross profit margin improvement signals better cost management and rising charter rates, offsetting some revenue softness.

Charter Rates & Utilization: Upward Trends Despite Short-Term Weakness

– Charter rates are on a steady rise, even as utilization rates have temporarily softened. – Demand from both O&G and offshore windfarm projects is expected to rebound, particularly from 2026 as new regional projects commence. – Management is optimistic about securing longer-term charters to avoid utilization gaps experienced in FY25.

Financial Forecasts and Key Metrics

Earnings revisions: FY25/26 earnings were adjusted by -6.9% and +4.2%, respectively, as management pivots towards longer-term contracts and offshore wind projects.
Cash position: Strong net cash flows from operations underpin both expansion and potential dividend growth.
Valuation: Trading at 6.9x FY25E P/E, MPM is at a significant discount versus global/regional peers (15-25x).

Business Model & Strategic Pivot: From Oil & Gas to Renewables

– MPM’s integrated business model spans vessel chartering, shipbuilding, maintenance, and repair, with a growing focus on renewables. – The company has successfully pivoted its fleet to support offshore wind farm construction and maintenance, especially in Taiwan. – A new Commissioning Service Operation Vessel (CSOV) has secured a 3-year charter with Vestas, a key global wind farm operator.

Growth Drivers and Value Proposition

• Significant opportunity to expand in Taiwan and regional offshore wind markets amid rising project launches.
• Utilization gaps in FY25 expected to be filled by longer-term contracts in FY26E and beyond.
• Charter rates and utilization are both on upward trends, underpinned by strong demand for marine logistics in energy transition projects.
• Shipyard expansion and potential vessel acquisitions are likely as demand for ship repair and maintenance rises.
• Expect increasing dividends as profitability and free cash flow grow.

Key Risks: What Could Go Wrong?

• Global recession or economic slowdown could reduce charter rates and vessel demand.
• Volatility in oil prices may negatively impact sentiment in vessel chartering and shipbuilding.
• Geopolitical tensions, especially between China and Taiwan, could disrupt regional operations.

Share Price Performance & Peer Comparison

– MPM shares have outperformed the Straits Times Index over 1M (+20%), 3M (+57%), and 12M (+27%) periods, reflecting investor optimism around the renewables pivot and improving margins. – Despite recent gains, the stock continues to trade at a deep discount to RNAV and peer multiples, highlighting laggard potential.

Historical Earnings and Balance Sheet Snapshot

Operational and Financial Ratios: Strengths and Efficiency

• EBITDA margin: 28-32% across forecast years, reflecting efficient operations.
• Net profit margin: Projected to rise from 17.8% (FY23A) to 22.2% (FY27E).
• ROAE: Consistently above 12% through the forecast period, with upside in FY26-27.
• Free cash flow yield: Robust, with expectations of 13-19% over the next three years.
• Net gearing: Maintains a net cash position, providing flexibility for expansion and dividends.

Peer and Sector Context: MPM’s Laggard Status Could Offer Upside

– MPM’s trading multiples remain substantially below both global and regional peers, positioning it as a potential catch-up play as sector re-ratings take hold. – The company’s pivot to renewables and strong backlog in vessel chartering for wind farms is expected to drive a re-rating in line with sector trends.

Stock Call and Outlook

– **BUY rating reaffirmed**, with a target price of SGD0.09 (+36% upside from the last close), up from SGD0.07. – The target price is based on 11x FY26E P/E, reflecting valuation upgrades across the small and mid-cap (SMID) space. – MPM is forecasted to deliver strong earnings growth, improving margins, and stable dividends, all underpinned by a robust net cash position and expanding demand in the renewable energy marine logistics sector.

Conclusion: Why Marco Polo Marine Is a Top Pick for 2025–2026

Marco Polo Marine stands out as a turnaround play with robust fundamentals and clear sectoral tailwinds. The company’s strategic pivot to offshore wind, prudent financial management, and strong cash generation position it for significant growth as the region’s energy mix evolves. Investors seeking exposure to Southeast Asia’s marine logistics and renewable infrastructure boom should keep MPM firmly on their radar.

About Maybank Research

Maybank Research Pte Ltd is a leading provider of financial analysis and equity research across Asia, covering a wide range of sectors and providing in-depth, actionable insights for institutional and retail investors.