Marco Polo Marine

Marco Polo Marine: OSK DMG had a yard visit in Batam. All three drydocks were busy with repair operations, construction of a third-party 8,000bhp AHTS vessel and two similar vessels for its own fleet. In preparation for better shipbuilding times, a new slipway is almost complete. The slipway provides for an optimal strategy to utilise available space for shipbuilding during times of boom, and make facilities improvements during downturns. + With current contracts expiring soon and AHTS supply still far behind demand in Indonesia, the house expects each vessel will be re-chartered immediately at prevailing market rates, which are 33% higher. Investors were most interested in the company’s 20% net margins. The house is confident that new vessels and re-chartering will help MPM maintain its margins. The house reckons 0.8x P/BV is undervaluing 15% ROE, with FY14 P/E at 5x. Maintains Buy at TP: 0.61