S& P&rsquo s securities finance product specialist Karthik Ramesh said Seatrium&rsquo s share price has declined over 90 per cent since 2020. 

In the past six months, the counter&rsquo s price has fallen to S$0.08 from S$0.12, and short interest over this period has risen by almost 40 times to about 4.4 billion shares on loan currently, he said.

Ramesh added that the bearish sentiments surrounding Seatrium could be due to the &ldquo heavy losses&rdquo the company posted for the full fiscal year  ended Dec 31, 2023, that were attributable chiefly to a slew of writedowns. 

Seatrium also announced  a settlement of S$182.4 million to Brazilian authorities  over  corruption allegations relating to the infamous Operation Car Wash, and is set to carry out a 20-to-1 share consolidation to boost investor interest in the company. 

&ldquo Share consolidation strategies can also be viewed as a negative signal to investors,&rdquo Ramesh added. 

Seatrium&rsquo s top executives unveiled some targets during the company&rsquo s recent Investor Day on Mar 15. The group is aiming to achieve earnings before interest, taxes, depreciation and amortisation (Ebitda) of more than S$1 billion by 2028, and a return on equity of more than 8 per cent by that time. 

&ldquo The high short interest in Seatrium may be due to investor disappointment towards its recently announced financial targets, leading to expectations that its share price may fall further,&rdquo said Gerald Wong, founder and chief executive of investment advisory platform Beansprout. 

Hesitation

Analysts have expressed some hesitation about Seatrium. 

OCBC analyst Ada Lim said in a note on Monday that the counter could &ldquo continue to trade sideways in the near term&rdquo , although the latest update on Operation Car Wash can be viewed as a &ldquo positive development that lifts the overhang on the stock&rdquo . 

Lim said the company&rsquo s H1 results could be &ldquo an important signpost&rdquo for investors about the management&rsquo s ability to execute and secure new orders at reasonable gross margins. 

OCBC revised its fair value estimate for Seatrium to S$0.155 from S$0.16.

UOB analyst Adrian Loh maintained a &ldquo buy&rdquo call on the counter, and said the company&rsquo s Ebitda target appears to be &ldquo an attainable goal&rdquo . 

&ldquo We continue to like Seatrium as we believe that the company will benefit from stronger offshore marine dynamics, as well as (a) demand for offshore vessels and structures related to the renewables industry,&rdquo he said. 

He added that the normalisation of economic activity should bring about a rise in the volume of shipping activities, which will boost Seatrium&rsquo s repairs and upgrades segment.