Analysts from Lim & Tan and UOB Kay Hian (UOBKH) have reiterated their confidence in Mainboard-listed ASL Marine after the shipyard reported an eight-fold jump in earnings from $2.1 million in 1HFY2025 to $17.1 million in 1HFY2026 ended Dec 31.

 

Revenue for ASL rose y-o-y by 5.5% to $181.6 million for 1HFY2026 with gross profit rising 24.4% y-o-y to $35.1 million. Notable was the decrease in finance costs which decreased by nearly 73% to $4.0 million which boosted the bottom line.

 

In his Mar 3 report, Nicholas Yon from Lim & Tan highlighted that the company, which is also in the ship chartering business, delivered an &ldquo earnings beat&rdquo for 1HFY2026. &ldquo Overall, the results reflect both operating leverage and the early benefits of balance-sheet normalisation, supporting the sustainability of earnings momentum,&rdquo he writes. Yon maintains his &ldquo buy&rdquo call and raises his target price from 33 cents to 45 cents per share.

 

For UOBKH&rsquo s Heidi Mo, ASL&rsquo s revenue was in-line with projections according to her Feb 16 report. Similar to Yon, she maintains her &ldquo buy&rdquo rating with an increased TP of 43 cents from the previous 35 cents.

 

Both analysts believe that ship repair will be ASL&rsquo s key earnings driver. Yon notes that ship repair and ship chartering continue to drive earnings, with the former recording $93.3 million to revenue, making it the highest contributor while Mo notes that the 9.7% y-o-y increase in ship repair revenue was driven by higher value repair projects and engineering product sales.

 

Moving forward, with a global ageing fleet driving demand for maintenance and repairs that have &ldquo structurally higher&rdquo margins than chartering or ship building, Yon expects the repairs segment to remain ASL&rsquo s core earnings &ldquo engine&rdquo while Mo sees it as an earnings &ldquo anchor&rdquo .

 

For the chartering business, Yon expects margins to trend higher as older, lower-margin contracts are progressively being refreshed at higher rates and utilisation improves. Mo notes the 30% q-o-q increase in chartering orderbook and 40% q-o-q decline in shipbuilding orders to signal a continued pivot towards infrastructure-linked chartering. She alludes to ASL benefitting from Singapore&rsquo s coastal protection projects which could total $100 billion.

 

Yon was surprised that the company declared an interim dividend of 0.13 cents per share, noting that this sent a signal of management&rsquo s confidence in earnings sustainability. He was also seemingly appreciative of ASL&rsquo s strengthening balance sheet as the company pared debt at a faster-than-expected pace. Noting that ASL has disposed of around $55 million of under-utilised assets without impacting operational capacity and coupled with a declining debt level, Yon projects that ASL can reach a net cash position by end-FY2027.

 

Similar, Mo points out that ASL&rsquo s net gearing has improved &ldquo significantly&rdquo to 0.77 times compared to 1.32 times for end-FY2025, with cash holdings more than doubling to $48 million and operating cash flow remaining &ldquo healthy&rdquo at $31.7 million for 1HFY2026.

 

Based on ASL&rsquo &rsquo s business outlook and strengthening balance sheet, Mo raises forecasted earnings by 4% to 9% for FY2026 to FY2028. With ASL trading at an &ldquo undemanding&rdquo P/E of around nine times of FY2027 forecasted earnings, she believes that the market has not priced in repair and chartering tailwinds and ASL&rsquo s pivot towards these two segments. Mo values ASL at 43 cents or 12 times P/E for FY2027 forecasted earnings, representing a slight discount to peers.

 

For Yon, he raises FY2026 and FY2027 profit forecasts for ASL to $33.1 million and $38.3 million respectively. He values the company&rsquo s shares at 45 cents orP/E of 12 times of estimated FY2027 earnings per share, also at a slight discount to peers.

 

 

&minus   Ship Repairs business segment continues to lead revenue growth and contribution, increasing 9.7% to $93.3 million towards the Group&rsquo s overall revenue growth in 1H FY2026.

 

&minus   Boosted by increased revenue and higher gross margin of 19.3%, gross profit improved 24.4% to $35.1 million 1H FY2026.

 

&minus   With the Group&rsquo s ongoing deleveraging initiatives, finance costs reduced significantly by 72.8% to $4.0 million in 1H FY2026.

 

&minus   5-year term loan (&ldquo Club Deal 2&rdquo ) of $132 million, which was secured in March 2025, has been pared down to $86.5 million as at 31 December 2025 with further aggregate prepayments of $35 million from vessel sales expected in 2H FY2026.

 

&minus   Continues to maintain healthy cash flow from operating activities with $31.7 million generated in 1H FY2026.

 

&minus   Stronger balance sheet with cash and cash equivalents more than doubling to $48.0 million, net assets increasing to $132.4 million and net gearing improving significantly to 0.77x as at 31 December 2025 (30 June 2025: 1.32x).

 

&minus   As at 31 December 2025, the Group&rsquo s outstanding shipbuilding order book from external customers stood at approximately $49 million and ship chartering revenue order book amounted to approximately $107 million.

 

&minus   Positive business outlook with major revenue growth drivers anchored by the resilient marine repairs industry and the S$100 billion coastal protection initiatives in Singapore.

 

SGX-Mainboard listed ASL Marine Holdings Ltd. (&ldquo ASL Marine&rdquo or &ldquo 洪 新 刘 海 运 &rdquo , the &ldquo Company&rdquo and together with its subsidiaries, the &ldquo Group&rdquo ), a vertically-integrated marine services group in the region with an established 50-year track record, is pleased to announce the results for the first half ended 31 December 2025 (&ldquo 1H FY2026&rdquo ) with a net profit of S$17.1 million, which was significantly higher than the previous corresponding period (&ldquo 1H FY2025&rdquo ) and has also surpassed the net profit of S$14.7 million for the full year ended 30 June 2025 (&ldquo FY2025&rdquo ). 

 

Commenting on the 1H FY2026&rsquo s results, Mr Ang Kok Tian, Managing Director, said: &ldquo We are encouraged by the result of our first-half net profit that has already surpassed last year&rsquo s full-year figure, highlighting the strength of our recalibrated service-centric business model led by the Ship Repairs segment.

 

At the same time, our deleveraging effort has significantly lowered our finance costs and net gearing. While advancing our asset optimisation strategy, we are also focused on expanding our Ship Chartering and Shipbuilding order books that are aligned with our core strengths and strategic objectives.

 

Looking ahead, we remain optimistic in our growth prospects, supported by the resilience of the marine industry and the growth opportunities presented by Singapore&rsquo s S$100 billion coastal protection initiatives.&rdquo

 

On the interim dividend of 0.13 SG cents per share, Mr Ang added: &ldquo Given the improved performance in our first-half and the resilience of our core business segments, the Board is pleased to maintain a strong commitment to rewarding our shareholders.

 

Revenue growth in 1H FY2026 driven by stronger performance of Ship Repairs and Ship Chartering business segments: The Group&rsquo s business activities are grouped under three business segments as follows:

 

1.  Ship Repair, Conversion and Engineering Services (&ldquo Ship Repairs&rdquo )

2.  Ship Chartering

3.  Shipbuilding

 

Ship repairs revenue increased by 9.7% or $8.2 million to $93.3 million in 1H FY2026 (1H FY2025: $85.0 million), primarily driven by higher-value ship repair projects and sale of engineering products. This business segment accounted for 51.4% of the Group&rsquo s revenue in 1H FY2026 (1H FY2025: 49.4%). 

 

Ship Chartering revenue increased by 2.5% or $1.3 million to $51.6 million in 1H FY2026 (1H FY2025: $50.3 million), mainly due to a) higher contributions from local infrastructure projects, trade sales, and other services and b) absence of incomes of certain vessels classified as held for sale in preparation for disposal. This business segment accounted for 28.4% of the Group&rsquo s revenue in 1H FY2026 (1H FY2025: 29.2%).

Under Shipbuilding, revenue is recognised only when the constructed vessels are delivered to customers and in 1H FY2026, revenue contribution from this business segment remained relatively stable at S$36.8 million (1HFY2025: S$36.8 million). This business segment accounted for 20.2% of the Group&rsquo s revenue in 1H FY2026 (1HFY2025: 21.4%).

 

Boosted by increased revenue and higher GP margin in 1H FY2026, gross profit increased 24.4% to S$35.1 million (1H FY2025: $28.2 million): Gross profit margin increased 2.9% to 19.3% in 1H FY2026 (1H FY2025: 16.4%). Ship Chartering and Shipbuilding segment delivered healthier GP margin of 19.1% and 15.5% respectively during the period under review.

 

Improved profitability in 1H FY2026 that was bolstered by lower finance costs as part of the Group&rsquo s sustained deleveraging initiatives: The Group&rsquo s finance cost reduced significantly by 72.8% or $10.8 million to $4.0 million in 1H FY2026 (1H FY2025: $14.8 million).

 

Overall, the Group&rsquo s net profit surged significantly to $17.1 million in 1H FY2026 (1H FY2025: $2.1 million), surpassing the Group&rsquo s FY2025 net profit of $14.7 million.

 

Continues to maintain healthy cash flow from operating activities with $31.7 million generated in 1H FY2026:

 

As part of its deleveraging initiatives, the Group has been undertaking sales of non-core assets and in 1H FY2026, the net cash generated from investing activities increased to $18.4 million in 1H FY2026 (1H FY2025: $6.1 million).

 

Overall, the Group&rsquo s cash and cash equivalents improved by 145.6% to $48.0 million as at end of 31 December 2025 (30 June 2025: $22.8 million).