Seven more 8,160bhp AHTS vessels to join fleet over FY14-15F
MPM will be growing its AHTS fleet, capitalising on the strong returns available to Indonesian vessels in the cabotage-protected offshore space. We understand the current planned delivery schedules are May 2014, Aug 2014, Jan 2015, March 2015, June 2015, July 2015, and Sept 2015. Vessel prices have jumped 15% since the start of 2013, following a > 35% charter rate jump over the last 18 months.
Attractive stock valuations
MPM’s stock trades at 6.0x FY14F P/E and 0.76x P/BV, undervaluing its strong growth potential and high-margin businesses. We believe the weaker tug and barge fleet returns and lower yard utilisation have already been priced in. Maintain BUY with SGD0.55 TP based on 9x FY14F P/E.
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