1Q profit down 13%, analysts raise target prices for this stock. Why?

Singapore's marine and offshore plays have done well -- take a look at Nam Cheong, Marco Polo Marine and ASL Marine.

More recently, a peer, Beng Kuang Marine (BKM), has gained investor appreciation, with the stock up 75% year-to-date (from 32 cents to 57 cents).

Despite negative 1Q26 results (net profit fell 12.7% to S$2.8 million), UOB Kay Hian and Lim & Tan Research reiterated their "BUY" ratings, and even raised their target prices to S$0.75 and S$0.69 respectively.

A core driver of BKM's future revenue is its healthy order book and promising contract pipeline.

Lim & Tan Research's analyst Nicholas Yon, notes that BKM has a solid S$55.9 million in secured contracts as of 1Q26, with S$51.2 million expected to be recognized this year.

He emphasizes the stability provided by the company's subsidiary, ASOM, noting that "around 80% FY26’s FPSO-related work was recurring in nature".

Imminent catalysts

Furthermore, UOB Kay Hian highlights an imminent catalyst regarding international projects.

Analysts Tang Kai Jie and Heidi Mo point out that "BKM’s upcoming FPSO renewals in West Africa are expected to be finalised over the next few months, with an estimated contract value of S$120m over three years".

BKM fpso5.26

In addition to Africa, the UOB KH analysts note BKM is executing five FPSO contracts in Guyana and holds a pipeline of four more projects in Central America.

Why re-rating

"BKM currently trades around 10.7x 2027F PE, below peers’ average of 13.2x 2027F PE, highlighting BKM’s undervaluation. We believe its strong
fundamentals, underpinned by a superior ROE of 38.8% vs the industry
average of 17.3% and a strong net cash position, continues to support the
case for valuation re-rating."
-- Tang Kai Jie, analyst

Looking ahead, both brokers expect a massive boost in the second half of 2026 once BKM completes the full consolidation of ASOM.

UOB Kay Hian analysts state, "We regard this as positive as we expect more revenue and profit contribution in 2Q26, and in 2H26 onwards following the full consolidation of ASOM".

Lim & Tan's analyst mirrors this sentiment, anticipating "earnings momentum to strengthen in 2HFY26 following the planned consolidation of ASOM".

BKM is also capturing increased confidence from institutional investors, having recently seen funds like Amova AM and Tokio Marine increase their stakes alongside BKM's own management.

BKM's Balance Sheet

In a capital-intensive marine industry, BKM's balance sheet stands out with a net cash position of S$26.9m as at end-25 with little debt.

BKM reported a strong cash flow from operations of S$26.6m as at end-25 as it executed its "BKM 2.0" strategy towards an asset-light operating model.

Fueled by substantial, recurring contract renewals, the imminent financial integration of ASOM, and a strong balance sheet, BKM is inspiring a consensus among the analysts: the operational tide is rising for BKM.

lamp9.25 → See Beng Kuan Marine's Powerpoint deck here.

→ See also:NAM CHEONG: 70% of Fleet on Long-Term Charters, Analyst Target Prices At 10-11x PE