MOOR SP / 1V3.SI
1H26 update on earnings investment and funding
Offshore Marine
We retain OUTPERFORM and reduce our 12-month target to S$0.134 from S$0.195. The revised model gives a DCF value of S$0.134 per share. Our revision reflects a larger cash investment burden, the loss of expected yard-sale proceeds and increased shares, despite a stronger outer-year revenue profile.
Revenue of S$12.33m was 5.8% below our S$13.1m forecast, while gross margin of 47.8% exceeded our 42.0% estimate. The group lost S$2.82m and shareholders lost S$2.88m, against the prior report’s S$1.4m net-loss estimate. The enlarged yard’s costs were the more material earnings surprise.
We expected asset recycling to ease the transition, but the S$29.7m sale of 51 Shipyard Road was rescinded. The separate 60 Shipyard Crescent lease still requires at least S$38m of new machinery investment. We now show this programme explicitly and assume no replacement disposal proceeds.
Our S$0.134 target implies 49.2% upside. We retain 15% WACC and 2% terminal growth. The recommendation depends on securing financing and converting capacity into profitable orders.
Unsecured funding, further dilution, additional site-development costs, delayed awards and weak cash conversion could reduce value.
