"This cements Marco Polo Marine’s role as a key partner in Asia’s energy transition, providing recurring income visibility while expanding shipyard capabilities," write the analysts.
In addition, the company won a $5 million ship repair contract using its new Dry Dock 4.
This new dry dock, according to Mo and Cheong in their Aug 27 note, is set to "meaningfully boost shipyard revenue and cash flows from 4QFY2025 onwards."
"The swift win post-launch highlights healthy underlying demand for MPM’s repair and maintenance services. With muted ship recycling activity and an ageing global fleet requiring greater upkeep, long-term demand for ship repair remains favourable," they add.
Also, there's recurring income from chartering vessels, thanks to favourable market conditions in the region. Southeast Asia Anchor Handling Tug Supply daily rates of US$8,498 further supports the sector backdrop, says Mo and Cheong.
Most recently, Marco Polo Marine says that its 49%-owned subsidiary PKR Offshore, which is a leading offshore wind support operator in Taiwan, intends to seek a Taiwan listing by 3Q2026.
The Singapore Exchange, according to Mo and Cheong, has preliminarily concurred that the proposed listing does not constitute a chain listing, subject to regulatory compliance.
Proceeds to be raised from the listing will go towards funding fleet expansion, including commissioning service operation vessels (CSOV), so as to tap fast-growing offshore wind markets in Taiwan, South Korea, and Japan.
"The timing is favourable, with shipping capital market activity picking up in 2025," says Mo and Cheong, noting that there's US$5.2 billion raised year to date, excluding cruise and passenger vessels.
They believe that demand for specialised vessels is set to accelerate, with total global offshore wind capacity at 83GW, 48GW under construction, and another 100GW expected within two years, according to the Global Wind Energy Council.
"Taiwan is at the epicentre of Asia’s offshore wind buildout, making PKR Offshore’s expansion both timely and strategic," they note.
The analysts has accorded a higher valuation multiple of 11.3x FY2026 PE or 2 sd above its historical three-year PE range, up from 9.5x FY2026 PE previously, or 1 sd above, thereby deriving his new target price of 8.8 cents.
"With robust sector tailwinds, a healthy balance sheet (with NAV 5.6 cents per share), and clear growth catalysts, we believe Marco Polo Marine is well-positioned to deliver sustained earnings growth and re-rating potential," write the pair.
