UOB Kay Hian Private Limited
Date of Report: Wednesday, 27 August 2025
Marco Polo Marine: Dual Engines Set to Power Exceptional Growth – Price Target Raised 16%

Overview: Marco Polo Marine Positioned for Multi-Year Upside

Marco Polo Marine Ltd (SGX: MPM), an integrated marine logistics group with a stronghold in regional waters, is embarking on a new era of growth. Backed by robust strategic moves and sector tailwinds, the company is leveraging both traditional oil & gas (O&G) and the rapidly expanding renewable energy market. UOB Kay Hian reaffirms its BUY rating, raising the target price by 16% to S\$0.088 per share, reflecting confidence in the company’s dual growth engines and strong financial health.

Company Snapshot

• Share Price: S\$0.067
• Target Price: S\$0.088 (+31.3% upside)
• Market Capitalization: S\$251.6 million (US\$195.5 million)
• GICS Sector: Industrials
• FY25 NAV/Share: S\$0.05
• FY25 Net Cash/Share: S\$0.02
• Major Shareholders: Lee Family (22.6%), Apricot Capital (16.17%), Penguin International (8.09%)
• 52-week High/Low: S\$0.071/S\$0.033

Strategic Developments Accelerate Growth Trajectory

1. Fourth Dry Dock Launch and First Major Contract

• Marco Polo Marine’s new Dry Dock 4 has secured its maiden ship repair contract, valued at approximately S\$5 million. The vessel is set to arrive at the Batam shipyard by end-August 2025, with expected repairs spanning two months.
• This swift post-launch contract underscores robust demand for shipyard repair and maintenance. With global fleet aging and ship recycling subdued, the long-term outlook for ship repair is highly favorable.
• Dry Dock 4 is expected to significantly boost shipyard revenue and cash flows from 4QFY25 onwards.

2. Three-Year Master Service Agreement (MSA) with Cyan Renewables

• MPM’s shipyard subsidiary inked a three-year MSA with Cyan Renewables to provide repair, maintenance, and conversion services for its offshore wind vessel fleet.
• This partnership strengthens MPM’s position in Asia’s renewable energy transition and ensures recurring income, while expanding the shipyard’s technical capabilities.
• The regional Offshore Support Vessel (OSV) market remains stable, with Southeast Asia’s AHTS term charter rates around US\$8,498/day.

3. Unlocking Value via PKRO Taiwan Listing

• MPM’s 49%-owned subsidiary, PKRO, a top offshore wind support operator in Taiwan, plans to pursue a Taiwan stock exchange listing by 3Q26.
• Proceeds will fund fleet expansion, including new Commissioning Service Operation Vessels (CSOVs) to serve booming offshore wind projects in Taiwan, South Korea, and Japan.
• Global offshore wind capacity stands at 83GW, with 48GW under construction and another 100GW expected to come online within two years, driving strong demand for specialized vessels.
• The Singapore Exchange (SGX-ST) has preliminarily concurred that the proposed listing does not constitute a chain listing, subject to regulatory compliance.

Financial Performance and Projections

Balance Sheet & Cash Flow Highlights

• Strong net cash position, with negative net debt-to-equity projected to reach (56.5)% by FY27.
• Healthy dividend yield, expected to rise to 3.0% from FY25 onwards.
• Capital expenditures are set to moderate after the significant Dry Dock 4 investment, supporting rising free cash flow.

Key Metrics and Profitability Trends

Investment Case: Dual Growth Engines Driving Value

• Recurring Shipyard Revenues: Expansion at Batam is set to deliver consistent cash flows, backed by strong contract wins and growing demand for ship repair from an aging global fleet.
• Renewable Energy Exposure: The Cyan Renewables master agreement and PKRO’s Taiwan strategy position MPM as a key logistics and support provider in Asia’s offshore wind boom.
• Value-Unlocking Catalyst: The upcoming PKRO Taiwan listing provides both capital for expansion and increased strategic visibility in high-growth markets.
• Further Growth Catalysts: The commissioning of the CSOV “MP Wind Archer” and three new crew transfer vessels (CTVs) will ramp up in 4QFY25, with full-year contributions in FY26.

Valuation and Recommendation

• BUY rating maintained with a 16% higher target price of S\$0.088 (previously S\$0.076).
• Valuation now based on 11.3x FY26F PE, or two standard deviations above the historical three-year PE range, reflecting strong sector tailwinds and clear growth catalysts.
• Current NAV stands at S\$210 million (S\$0.056/share), and a robust balance sheet supports further fleet and yard expansion.

Potential Share Price Catalysts

• Upside surprises in ship charter rates and vessel utilization.
• New chartering contract wins for the fleet.
• Higher-value ship repair projects booked during the year.

Conclusion

Marco Polo Marine is docked and loaded for sustained multi-year growth, underpinned by recurring shipyard revenues and strategic expansion into the offshore wind logistics sector. With its Batam yard now boasting four dry docks, lucrative new contracts, a game-changing partnership in renewables, and a value-unlocking Taiwan listing on the horizon, MPM stands out as a compelling BUY for investors seeking both stability and upside in the marine logistics and renewables space.
Broker: UOB Kay Hian Private Limited
Date: 27 August 2025