Jason Marine Group - SAC Capital 2021-10-19: Trading Below Cash Value

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JASON MARINE GROUP LIMITED (SGX:5PF)

Jason Marine Group - Trading Below Cash Value

• Jason Marine Group (SGX:5PF) is a systems integrator and service provider for marine communication, navigation and automation systems installed on marine vessels and offshore O&G platforms.
• Jason Marine offers turnkey solutions as well as maintenance and support services and airtime services. It has service centres located in Singapore, China, Thailand, Malaysia and Indonesia.

Jason Marine Group - Company Background

• Jason Marine Group (SGX:5PF) is a marine electronic systems integrator operating in marine and offshore O&G industries. The Group focuses on marine communication, navigation and automation systems and carries an extensive range of electronic equipment from proprietary brand manufacturers.
• In total, Jason Marine Group represents over 45 brands such as Koden, Samyung and Danelec. Examples of some systems provided are vessel monitoring system, VSAT system, helideck monitoring system and for equipment, there are GPS Compass, Electronics Chart, Marine Radar etc.
• All vessels (e.g. commercial vessels and naval vessels) and offshore platforms (e.g. drilling rigs and FPSO) are required to install navigation and communication systems on board for safety reasons. Some of the customers that Jason Marine service are Keppel Corp (SGX:BN4), Sembcorp Marine (SGX:S51), Penguin International (SGX:BTM) and Pacific International Lines.
• Jason Marine has mainly 3 business segments:
  1. Sale of goods (74% of FY21 revenue),
  2. Rendering of services (18% of FY21 revenue), and
  3. Airtime revenue (8% of FY21 revenue).
• See report attached below for further details.

Higher oil price drives construction and utilisation of offshore platforms.

• Oil price is up more than 50% this year to reach a 3-year high of Jason Marine’s project orders are mainly from the O&G industry, accounting for 74% of revenue.

Lower vessel calls affects volume of maintenance work.

• Jason Marine typically carries out maintenance work on the communication systems onboard the vessels when the ships call at the ports. System maintenance services have faced disruptions from lower vessel calls as a result of worldwide port congestions.
• Year-to-September, the number of vessel calls declined 12.6% at the Singapore ports, after falling 30% in 2020. Maintenance revenue is poised to improve when the delays at ports are resolved.

Rising project value per vessel.

• Ship crews stranded at sea due to port congestions and anti-virus measures have fuelled the need for more and smarter communication and navigation systems onboard for the welfare of the seafarers. In addition, newbuilding orders are trending towards bigger vessels to transport more crew and cargo. We believe these will drive higher project value for new orders.

Trades at below cash and book.

• Jason Marine's FY21 gross sheet has net cash of S$15.2m as at Mar 21.
• See
  • Jason Marine's Share Price,
  • Jason Marine's Target Price,
  • Jason Marine's Analyst Reports,
  • Jason Marine's Dividend History,
  • Jason Marine's Announcements,
  • Jason Marine's Latest News.
• Jason Marine's share price is trading below net cash of S$0.145 per share, and 40% discount to book. See the report attached below for complete analysis.

Lim Shu Rong SAC Capital Research | https://www.saccapital.com.sg/ 2021-10-19

SGX Stock Analyst Report NOT RATED MAINTAIN NOT RATED 99998 SAME 99998