Highlights

• FY26 revenue and earnings are in line, forming 95% and 103% of our forecasts respectively. 
   
• Ship chartering drove growth, with revenue up 10% yoy and gross margin improving to 20.1%, while ship repair remained resilient. 
   
• Maintain BUY with a slightly lower target price of S$0.41, pegged to an unchanged 12x FY27F PE. 
  
   

Analysis

• Earnings slightly ahead of expectations. ASL Marine (ASL) reported FY26 revenue of S$360.7m (+3.0% yoy) and PATMI of S$33.3m (+128.3% yoy), accounting for 95% and 103% of our respective forecasts. Growth was driven by stronger ship chartering contributions while shipbuilding and ship repair remained stable. The earnings beat was supported by stronger ship chartering contributions and continued deleveraging, with finance costs falling 66% yoy. Gross margins improved 4.1ppt to 21.4%, while PATMI margin improved 5.1ppt to 9.2%.
   
• 2HFY26 margins strengthened on better business mix. For 2HFY26, ASL reported revenue of S$179.1m (+0.7% yoy) and PATMI of S$16.2m (+23.3% yoy). Ship chartering revenue rose 18.6% yoy, offsetting softer ship repair and shipbuilding contributions. Gross margin expanded 5.2ppt yoy to 23.4%, driven by stronger ship chartering margins on higher charter rates, lower maintenance and operating costs, alongside improved shipbuilding margins.