MarcoPolo Marine    Last:0.161    -0.002

Marco Polo - IPO

From OSK DMG

Marco Polo Marine: Better Charter Rates In Store (BUY, SGD0.43, and TP: SGD0.61)

MPM’s 2QFY13 results were slightly weaker than expected as poor weather dampened the tug & barge operations while volumes at the drydocks declined. We see much stronger core performance in FY14F as its expanding fleet of Indonesian offshore support vessels (OSVs) will enjoy a 30% revision when their charters expire.

Surprisingly low drydock volume, protracted monsoon period in 2Q. While the drydocks still posted a 75% utilization rate, the actual repair work per vessel was uncharacteristically lower than average. This resulted in the company’s quarterly revenue coming in at a mere SGD4.8m versus SGD8m-SGD9m typically. The unusually long monsoon season also negatively affected its tug & barge operations.

Trimming FY13F core earnings by 13% adjusting historical numbers for comparability. We are paring down our FY13F core earnings estimate by 13% as we had been a tad too optimistic on subsidiary PT Bina Buana Raya’s (BBR)’s current-year contributions. Notwithstanding this cut, we still see BBR growing at 40%-60% pa. for the next three years. We are also adjusting MPM’s historical numbers as it no longer recognizes revenue on vessels built for and sold to BBR, preventing an apple-to-apple comparison. The adjustments still overstate its FY12 earnings as its breakdown for third-party revenue is unavailable.

30% charter revisions in 1QFY14F. The charter rates for BBR’s OSVs should see a 30% increase to match Indonesia’s levels when their charters expire in 4QFY13. Also, MPM expects the four AHTS vessels it is due to deliver to BBR in FY14F enjoy Indonesia’s strong rates and contribute to the 29% core earnings jump in FY14F.

Strong core earnings growth, low valuations. In view of the robust operating environment in Indonesia, we are forecasting a 20%/29% core earnings growth for FY13F/14F. We like MPM for its: i) exposure to cabotage-protected Indonesia, ii) high margin businesses, iii) strong earnings growth, and iv) low 7.1x/5.5x FY13F/14F EPS and 0.88x/0.77x FY13F/14F BV on 15% ROE. Our SGD0.61 TP is based on a 9x blended FY13F/FY14F EPS.

 

Marco Polo Marine: Waiting for offshore division to grow

_{By Low Pei Han
Fri, 10 May 2013, 16:43:59 SGT}

Marco Polo Marine (MPM) reported a 31% YoY fall in revenue to S$21.3m but a 121% rise in net profit to S$9.3m in 2QFY13, such that 1HFY13 net profit accounted for 58% of our full year estimate. Excluding an exceptional gain of S$5.7m, core net profit was about S$3.7m, slightly below our expectations. There was a slowdown in ship repair, and there were no external newbuild orders. However, management expressed the possibility of securing external OSV orders in the coming quarter. Meanwhile, the group is still upbeat on the OSV segment. YTD, MPM’s stock price is up about 11% vs the STI’s 8% gain. We tweak our estimates to account for the lower-than-expected performance by the ship repair division, and as such our fair value estimate drops from S$0.56 to S$0.51. As there is now a less than 30% upside potential for the stock (market cap less than S$150m), we downgrade MPM to HOLD.

Soft 2QFY13 results
Marco Polo Marine (MPM) reported a 31% YoY fall in revenue to S$21.3m but a 121% rise in net profit to S$9.3m in 2QFY13, such that 1HFY13 net profit accounted for 58% of our full year estimate. Excluding an exceptional gain of S$5.7m, core net profit was about S$3.7m, slightly below our expectations. The lower revenue was mainly due to lower contributions from the shipbuilding and repair segment at S$4.8m (-51% QoQ, -82% YoY). Ship chartering revenue (S$16.5m) grew 200% QoQ and 237% YoY, mainly because of BBR, which is now consolidated in MPM’s financials. Gross margin was 42% in 2QFY13, compared to 27% in 2QFY12 and 39% in 1QFY13.

Slow down in ship repair
There was no shipbuilding revenue in the last quarter as revenue from BBR could not be recognized (eliminated from accounting consolidation) since BBR became a subsidiary. There was also no third-party work. However, management expressed the possibility of securing external OSV orders in the coming quarter. Ship repair also saw a slow-down, which management thinks is seasonal.

Supported by ship chartering operations
The group is still upbeat on the outlook for the ship chartering business currently its entire fleet of offshore vessels is on charter. As mentioned in our earlier reports, we expect the offshore division to be one of the major drivers of growth going forward. Management plans to grow the number of OSVs under BBR from three now to five by the end of this year, and add four more in 2014.

Downgrade to HOLD
YTD, MPM’s stock price is up about 11% vs the STI’s 8% gain. We tweak our estimates to account for the lower-than-expected performance by the ship repair division, and as such our fair value estimate drops from S$0.56 to S$0.51. As there is now a less than 30% upside potential for the stock (market cap less than S$150m), we downgrade MPM to HOLD.

 

Looks like you guys are right, there is a lack of buying interest in this stock. Fundamentals are good, and OCBC has a buy call for $0.56. Lets hope more coverage means more interest!

 

The stock didn't move today cos the good news is negated by the bad news. The bad news is the ship building and repair got no business last quarter. According to management the slowdown is seasonal and there is a possibility of an OSV order in the next quarter.
The good news is the ship chartering service grew more than 200% on a YOY basis. This will be the driver of the company with 2 new OSV adding to the existing 3 by end of this year. And there will be 4 more new OSV by end of 2014. MPM has been holding well in the O&M industry despite the bad patch in the 1QY13.

 

Lets see whether the stock price will propel of die down after a few days. MPM seriously have to attract more buying interest for a boost in stock price. 

lzt197208      ( Date: 09-May-2013 21:54) Posted: Marco Polo Marine’s net profit soared by nearly 80.0% to  S$15.4 million while its recurring profit grew by 8.4% to S$11.1  million for the first half financial year ended 31 March 2013

 

 

Hopefully loh. From past experience MPM always never benefit in terms of stock price even with positive earnings. Hoping the new  subsidiary BBR would contribute to the Q2 results and translate to better stock price. 

serialain      ( Date: 09-May-2013 11:45) Posted: Q2 results should be releasing after market closes today or very soon. Hope for a good report as a catalyst for this stock!

 

Q2 results should be releasing after market closes today or very soon. Hope for a good report as a catalyst for this stock!

 

The cabotage law has been enforced since 1 January 2013. Just wonder how much effect it has on the bottom line of Marco Polo Marine? Anyone has information on MPM subsidiary BBR? 1QY13 earning?

Octavia      ( Date: 23-Feb-2013 11:44) Posted: Marco Polo Marine: Generating Growth Through Offshore Oil & Gas Exposure And Publicly-Listed Indonesian Subsidiary Read more:http://www.sharesinv.com/articles/2013/02/22/marco-polo-marine-generating-growth-through-offshore-oil-gas-exposure-and-publicly-listed-indonesian-subsidiary/

 

just waiting i bgt few lots and still waiting for the right time... maybe is after result release the can see some uptrend as they will really benefits from the subsidiary BBR under cabotage law.

 

MPM Chairman had indeed been buying consistently and his latest buy is on 14/3, 500 lots at 43cts.

The stock may not have big movement but it had quietly formed a higher low last week. if this week break above 44cts, uptrend will continue.

MPM economic moat is its indonesian flagged support vessels that are serving the lucrative Indon oil industry. Since 1 Jan 2013, Indon govt had only allowed under its cabotage law, Indon flagged SV to operate in its water. MPM through its subsidiary BBR is in a sweet spot.

Other than the above securities firms like Phillips, OCBC are major shareholders in MPM. Their holdings and other major shareholders can be see in the latest MPM annual report.

 

Strange that nobody mentioned this...

Mr. Lee Wan Tang, Chairman of Marco Polo Marine, purchased 1,000,000 shares at a price of 42c per share on 19 February 2013. And he has been doing that consistently for the past year, upping his interest in the company by ~ 9,000 lots.

See more at:  http://thefinance.sg/2013/02/20/marco-polo-marine-insider-buying-continues/   

Persistent insider buying = good news for share holders :) Am vested with a few lots.

 

0.50 when?????

No volume for very long time liao.

 

 

Come 50 cents....

 

Thanks for the info. 

Octavia      ( Date: 23-Feb-2013 11:44) Posted: Marco Polo Marine: Generating Growth Through Offshore Oil & Gas Exposure And Publicly-Listed Indonesian Subsidiary Read more:http://www.sharesinv.com/articles/2013/02/22/marco-polo-marine-generating-growth-through-offshore-oil-gas-exposure-and-publicly-listed-indonesian-subsidiary/

 

 

haiz...I think ultimately people now go for short term punting instead of looking at FA. This counter is going back to where it is ...no interested buyers = no price jump 

 

http://sgx.i3investor.com/servlets/ptres/3650.jsp

 
Technical  capabilities  top  in  class.    MPM's shipyard has delivered AHTS vessels with sustained  bollard  pulls  averaging  15%  in  excess  of  the  norm.  Impressively,  it  recently outfitted  a  DP-3  vessel  -  a  milestone  usually  reserved  for  established  large  yards.  For  a small company, this level of technical competence is remarkable. We like small companies with superior capabilities - these tend to appreciate strongly over the long term.

 

James, to me ASL Marine is also undervalued like Marco Polo. At today's ASL  closing price 72ct,  PE 9.4X, NAV 88cts,.......looks good, got potential to rise further.

Target price: OCBC: 82ct / DBS: 90c, citing more room to grow / CIMB:  85c. (All 3 TPs were issued recently:  Nov, Dec and Jan 2013.)

Think u shd hold ASL, no point  switching to ezra or swiber.

Shipping stocks seem to be in the limelight this year, all the best to u!

 

 

 

Laggards in shipping, offshore marine/gas seem to be in focus since Nov, but personally i'm weary of swiber and ezra, bcos do u know they hv very high net gearing? 135% and 110% respectively! (according to UOBKH report this month). ASL with  52.9% gearing looks tame compared to the 2 above. 

Howevr,  you may decide  to switch boat,  from an underperforming stk to  one that is rallying now. How we play  depends on  each individual's strategy, conviction  and risk appetite.

 

james87      ( Date: 11-Jan-2013 10:28) Posted: Hi steadylar. Yea thanks. I'm looking to channel some of my funds to swiber with low PE and larger market cap as compared to ASL. What do think?  steadylar      ( Date: 11-Jan-2013 10:11) Posted: Shipping stks on a roll!  cosco, yzj, nol.... Marco polo vroom! James, your asl marine is also in the right sector, congrats!