Company Coverage
ASL Marine (ASL SP): FY26: Strong Earnings Growth And Improving Outlook
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.30
S$0.41
+36.7%
S$0.43
Analyst
Analyst
Highlights
- FY26 revenue and earnings are in line, forming 95% and 103% of our forecasts respectively.
- Ship chartering drove growth, with revenue up 10% yoy and gross margin improving to 20.1%, while ship repair remained resilient.
- Maintain BUY with a target price of S$0.41, pegged to 12x FY27F PE. The lower target price reflects a dilution from ASL’s enlarged share base.
Analysis
- Earnings slightly ahead of expectations. ASL Marine (ASL) reported FY26 revenue of S$360.7m (+3.0% yoy) and PATMI of S$33.3m (+128.3% yoy), accounting for 95% and 103% of our respective forecasts. Growth was driven by stronger ship chartering contributions while shipbuilding and ship repair remained stable. Profitability improved significantly, supported by a 4.1ppt yoy expansion in gross margin to 21.4% and a 66% yoy decline in finance costs following continued deleveraging.
- Ship chartering: Driving top-line growth. Ship chartering revenue rose 10.1% yoy to S$105.3m, driven by stronger contributions from local infrastructure projects, despite softer overseas infrastructure and towage jobs. Gross margin surged to 20.1% from 5.7%, lifting gross profit to S$21.2m. Ship chartering’s orderbook remained strong at S$61m (+60.5% yoy), while management expects demand to remain supported by infrastructure and energy-related projects across Asia.
- Ship repair remains the core earnings anchor. Ship repair, conversion and engineering revenue was broadly stable, rising 0.8% yoy to S$170.9m (47% of revenue), supported by higher-value repair projects. 2HFY26 revenue fell 8.2% yoy due to lower contributions from precast projects.
Highlights
- FY26 revenue and earnings are in line, forming 95% and 103% of our forecasts respectively.
- Ship chartering drove growth, with revenue up 10% yoy and gross margin improving to 20.1%, while ship repair remained resilient.
- Maintain BUY with a target price of S$0.41, pegged to 12x FY27F PE. The lower target price reflects a dilution from ASL’s enlarged share base.
Analysis
- Earnings slightly ahead of expectations. ASL Marine (ASL) reported FY26 revenue of S$360.7m (+3.0% yoy) and PATMI of S$33.3m (+128.3% yoy), accounting for 95% and 103% of our respective forecasts. Growth was driven by stronger ship chartering contributions while shipbuilding and ship repair remained stable. Profitability improved significantly, supported by a 4.1ppt yoy expansion in gross margin to 21.4% and a 66% yoy decline in finance costs following continued deleveraging.
- Ship chartering: Driving top-line growth. Ship chartering revenue rose 10.1% yoy to S$105.3m, driven by stronger contributions from local infrastructure projects, despite softer overseas infrastructure and towage jobs. Gross margin surged to 20.1% from 5.7%, lifting gross profit to S$21.2m. Ship chartering’s orderbook remained strong at S$61m (+60.5% yoy), while management expects demand to remain supported by infrastructure and energy-related projects across Asia.
- Ship repair remains the core earnings anchor. Ship repair, conversion and engineering revenue was broadly stable, rising 0.8% yoy to S$170.9m (47% of revenue), supported by higher-value repair projects. 2HFY26 revenue fell 8.2% yoy due to lower contributions from precast projects.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
S$0.30
S$0.41
+36.7%
S$0.43
Analyst
Analyst
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This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at the following link: this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
