Mermaid Maritime and Its Peers: An In-depth Analysis
Date of Report: November 16, 2024
Broker Name: CGS International
Introduction
In the bustling arena of the Oil & Gas Equipment & Services sector in Singapore, Mermaid Maritime has been making waves. This report delves into the financial performance and outlook of Mermaid Maritime, alongside its peers in the region. With key insights into the company’s strategic moves and market conditions, investors can glean a comprehensive understanding of what lies ahead.
Mermaid Maritime: Navigating Through Challenges
Mermaid Maritime’s performance in 3Q24 saw a dip in revenue due to lower-than-expected fleet utilization and the completion of decommissioning contracts in the UK and Thailand. The company, however, saw a significant 87% utilization rate in its subsea inspection, repair, and maintenance fleet, marking the highest so far for the year. Despite these challenges, Mermaid Maritime’s net profit, excluding a forex loss of US\$2.7 million, aligned with the forecast at US\$3.8 million. The company’s strong order book of US\$814 million is a testament to its robust market presence. However, revenue forecasts for FY24-26F have been reduced by 2-12% based on modified fleet utilization and decommissioning assumptions. Notably, a potential rebound in US\$ against the THB is expected to mitigate forex impact. Trading at a 32% discount to global peers, Mermaid Maritime remains an attractive prospect with a reiterated ‘Add’ recommendation at a lower target price of S\$0.16.
Pacific Radiance Ltd: A Quiet Contender
Pacific Radiance Ltd is not rated in the current report but is noted for its potential, with a market cap of US\$50 million. The company is on a trajectory of remarkable growth with a projected 1454.8% EPS CAGR over two years, marking it as a significant player to watch. Its recurring ROE stands at 0.57, indicating a strong return potential for investors, although its dividend yield remains at zero.
Dyna-Mac Holdings Ltd: Steady Progress
Dyna-Mac Holdings Ltd, also not rated, showcases robust growth with its market cap of US\$618 million. The company is on track with a two-year EPS CAGR of 45.2%. Dyna-Mac demonstrates a strong recurring ROE of 6.65, coupled with a modest dividend yield of 2.6%, reflecting its stable financial health and ongoing growth trajectory.
ASL Marine Holdings Ltd: Awaiting Developments
ASL Marine Holdings Ltd, with a market cap of US\$40 million, remains unrated. Its future performance hinges on strategic developments, with no current EPS or dividend yield data available. Investors are keenly watching for any movements that could signal a change in ASL Marine’s financial landscape.
Marco Polo Marine Ltd: Emerging Strength
Marco Polo Marine Ltd, boasting a market cap of US\$148 million, is on a promising path with a two-year EPS CAGR of 17.7%. The company maintains a recurring ROE of 0.94, and a dividend yield of 1.9%, showcasing its potential as an emerging leader in the sector.
Kim Heng Ltd: Steady on Course
Kim Heng Ltd stands with a market cap of US\$46 million and remains unrated. While specific growth figures are not detailed, the company is noted for its consistency and strategic positioning within the market.
Nam Cheong Ltd: Potential Unlocked
Nam Cheong Ltd, with a market cap of US\$118 million, remains unrated. Its strategic moves in the industry are being closely monitored by investors, looking to unlock potential growth opportunities in the near term.
Conclusion
The Oil & Gas Equipment & Services sector in Singapore is marked by a diverse range of companies, each with unique strengths and challenges. Mermaid Maritime, with its strategic initiatives and strong order book, remains a key player to watch. Meanwhile, its peers continue to navigate market conditions with varying degrees of success, offering investors a rich tapestry of opportunities and risks.
