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Jason Marine Group - SAC Capital 2022-07-08: Orders Are Returning

JASON MARINE GROUP LIMITED (SGX:5PF) | SGinvestors.io JASON MARINE GROUP LIMITED (SGX:5PF)

Jason Marine Group - Orders Are Returning

  • Jason Marine (SGX:5PF)'s FY22 revenue and net profits were S$30.9m (+3%) and S$0.2m (-23%) respectively. The decline in net profit is mainly due to a decrease in government grant of ~S$1.2m and one off termination payment of ~S$0.5m in FY21. Government grant support ceases in FY23.



Enquires from customers have picked up

  • Enquires from customers have picked up post-opening, and more projects are coming back on-stream after a slowdown in the past 2 years. Local output of marine and offshore engineering work in April has risen 27.6% y-o-y and 18.3% from Jan-April. Higher crude prices, shipbuilding orderbook and easing of travel restrictions are tailwinds for the sector. We believe Jason Marine’s order intake could return to pre-pandemic level.
  • Jason Marine has established an office in Italy. This will better position them to enter the EU market and expand their outreach to EU customers.
  • Vessel owners are also placing more importance on cybersecurity, prompting more upgrades/replacements to their navigation and communication systems. This trend is likely to benefit the Group as well.
  • Like other project engineering companies, Jason Marine faces execution challenges from component/equipment shortages which might delay revenue recognition and risk cost overrun. Jason Marine reflected lower project-based revenue (-7%) as the Group was unable to secure the equipment hence hampering the progress of its projects. Nevertheless, these shortages are short-term concerns and likely to ease as chip capacities redistribute following a slowdown in consumer electronics demand.
  • In view of market uncertainty and volatility, Jason Marine has drawn down a $5m loan solely for working capital needs. The loan is fixed at 2-2.5% per annum over a 5-year tenure.

Net Cash Balance Sheet






Lim Shu Rong SAC Capital Research | https://www.saccapital.com.sg/ 2022-07-08
SGX Stock Analyst Report NOT RATED MAINTAIN NOT RATED 99998.000 SAME 99998.000



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