MPM’s charter rates have also picked up by 15%-20% y-o-y in 1HFY2022, due to stronger demand as well as the reflagging of one vessel to service the Taiwan offshore windfarm market. RHB expects charter rates to rise by a further 10% to 20% over the next few months due to limited supply and strong demand.
Seet points out that MPM has been actively diversifying and expanding its activities beyond the O&G industry. As of 1HFY2022, 40% of the company’s utilised vessels are working on offshore windfarm projects in Taiwan.
“We believe that MPM will expand its operations in Taiwan, and will likely look to increase its chartering fleet in this space and have at least 50% of its fleet servicing the renewable energy sector by 2QFY2023.
“The acquisition of Taiwan-based PKR Offshore will add two offshore service vehicles (OSVs) to the group’s fleet – taking its total size to 13 OSVs, of which five are servicing the windfarm sector in Taiwan,” says Seet.
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Improving Covid-19 situation in Taiwan is likely to speed up the progress of MPM winning new renewable energy projects. Seet believes that the continued recovery will be positive for MPM’s profitability.
“This, together with the catalyst of more new renewable energy contracts, leads us to maintain our ‘buy’ recommendation.”
As at 10.24am, shares in MPM are trading 0.4 cents higher or 13.3% up at 3.4 cents.
