- We remain upbeat on Marco Polo Marine (SGX:5LY) due to its accelerating growth outlook. Revenue from its new shipyard could be stronger than anticipated. We believe the company may take about three years (instead of four years) to deliver its S$198m vessel, while its new dry dock operation could ramp up faster than our expectations.
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Shipyard revenue could be stronger than expected.
- We believe there could be further upside to our shipyard revenue projection – this FY26F figure was previously at S$97m, comprising:
- A ~S$50m average annual contribution from its recent S$198m project win for the construction of an advanced oceanographic research vessel for Taiwan’s National Academy of Marine Research over four years; and
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- As Marco Polo Marine’s three dry docks contributed S$43m in FY25 shipyard revenue, we now expect four dry docks in FY26 to contribute a ~S$57m in revenue.
- Also, we now think that the research vessel could be delivered in three years instead of four, which raises our estimated annual revenue recognition to ~S$66m, bringing our estimated FY26 shipyard revenue to over S$120m.
- As such, we raise FY26-28F earnings and Marco Polo Marine's target price further on better-than-expected shipyard revenue.
Raise FY26-28F earnings and target price by 4%, 9% and 9% each.
- Read more at SGinvestors.io.
