ASL MARINE “Revitalised”: UOB KH Starts Coverage, Sets 33-Cent Target

THE CONTEXT • If you’ve followed marine stocks, you know it’s been a terrible ride. But out of the list of survivors, ASL Marine is finally catching the spotlight—and with good reason.  • After slogging through about eight years of debt repayments and doing serious belt-tightening, ASL is showing it’s not just afloat, but sailing full steam ahead. • Just take a look at that share price—about 5-7 cents for the past 5 years or so, then it started surging in Aug 2025 and touched 26 cents this week. Ang Kok Tian, Chairman, MD & CEO of ASL Marine. File photo.• What changed? In March 2025, ASL landed a chunky S$132 million loan from three local banks and paid off bondholders for good. That’s a huge sign of stability for any company, let alone one in this tough sector. • Results back it up: Margins have improved, cash flow is solid, and FY2025 core profit (after stripping out old debt expenses) hit S$24.7 million. • That’s a big thumbs-up from management—and a signal: ASL’s not just surviving, it’s thriving. • For more, read excerpts of UOB Kay Hian's initiation report below ...

Excerpts from UOB Kay Hian report
Analyst: Heidi Mo

Analysis
• Integrated marine platform with strong track record. ASL Marine (ASL) is a vertically-integrated marine services group with over 40 years of operating history, offering end-to-end solutions across shiprepair, shipbuilding, and shipchartering.

Listed on the SGX Mainboard since 2003, it operates from large-scale shipyards in Singapore and Batam, providing more than 4,000m of berthing space and over 300,000 DWT of dry-docking capacity. 

• Post-restructuring earnings recovery. FY25 marked a major turnaround with net profit surging 287% yoy to S$14.7m, driven by stronger project execution and margin expansion.

Excluding S$10m of non-cash amortisation, core net profit was S$24.7m.

With the legacy restructuring charges now fully rolled off, ASL enters FY26 with a clean base and steady profitability.

• Deleveraging and disciplined capital management. ASL’s five-year Club Term Loan refinanced S$150m of maturing bonds without lender haircut or shareholder dilution, signalling creditor confidence.

The facility is collateralised by S$268m of assets at market value and bears a competitive rate of 2.5%.

Under its Fleet Optimisation Programme, ASL plans S$52.6m of vessel disposals in FY26-27 to fund debt repayment, targeting net gearing of 0.5x.

Annual interest savings of S$7m-8m are expected to lift net margins by 3ppt and accelerate free cash flow generation.

• Recurring shiprepair growth from infrastructure projects. The high margin shiprepair segment (50% of revenue) provides steady earnings, supported by structural tailwinds from an ageing global fleet and an upcoming third floating dock.

Long-term charter contracts worth S$82m and an S$83m shipbuilding orderbook underpin visibility from FY26-27, alongside exposure to Singapore’s major national infrastructure projects like Tuas Mega Port. 

Source: Bloomberg, UOB Kay Hian

Valuation • Initiate coverage with BUY and a target price of S$0.33, implying 54% upside.  Heidi Mo, analyst Our target is pegged to 11.6x FY26F PE, which is slightly lower that its peers’ average of 13.8x FY26F PE. This reflects ASL’s smaller scale and relatively lower trading liquidity. Room for re-rating. ASL remains undervalued relative to peers, trading at 7.6x FY26F PE, vs the Singapore-listed marine sector average of 13.8x PE and 1.6x P/B. The stock’s deep 45% discount reflects lingering restricting overhang, despite evidence of a clean earnings recovery, steady deleveraging and recurring cash generation. As post-restructuring profitability normalises, we believe ASL’s valuation gap to peers should narrow.

→ See the full UOB KH report.

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