In his Mar 3 report, Nicholas Yon from Lim & Tan highlighted that the company, which is also in the ship chartering business, delivered an “earnings beat” for 1HFY2026. “Overall, the results reflect both operating leverage and the early benefits of balance-sheet normalisation, supporting the sustainability of earnings momentum,” he writes. Yon maintains his “buy” call and raises his target price from 33 cents to 45 cents per share.
For UOBKH’s Heidi Mo, ASL’s revenue was in-line with projections according to her Feb 16 report. Similar to Yon, she maintains her “buy” rating with an increased TP of 43 cents from the previous 35 cents.
Both analysts believe that ship repair will be ASL’s key earnings driver. Yon notes that ship repair and ship chartering continue to drive earnings, with the former recording $93.3 million to revenue, making it the highest contributor while Mo notes that the 9.7% y-o-y increase in ship repair revenue was driven by higher value repair projects and engineering product sales.
Moving forward, with a global ageing fleet driving demand for maintenance and repairs that have “structurally higher” margins than chartering or ship building, Yon expects the repairs segment to remain ASL’s core earnings “engine” while Mo sees it as an earnings “anchor”.
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For the chartering business, Yon expects margins to trend higher as older, lower-margin contracts are progressively being refreshed at higher rates and utilisation improves. Mo notes the 30% q-o-q increase in chartering orderbook and 40% q-o-q decline in shipbuilding orders to signal a continued pivot towards infrastructure-linked chartering. She alludes to ASL benefitting from Singapore’s coastal protection projects which could total $100 billion.
Yon was surprised that the company declared an interim dividend of 0.13 cents per share, noting that this sent a signal of management’s confidence in earnings sustainability. He was also seemingly appreciative of ASL’s strengthening balance sheet as the company pared debt at a faster-than-expected pace. Noting that ASL has disposed of around $55 million of under-utilised assets without impacting operational capacity and coupled with a declining debt level, Yon projects that ASL can reach a net cash position by end-FY2027.
Similar, Mo points out that ASL’s net gearing has improved “significantly” to 0.77 times compared to 1.32 times for end-FY2025, with cash holdings more than doubling to $48 million and operating cash flow remaining “healthy” at $31.7 million for 1HFY2026.
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Based on ASL’’s business outlook and strengthening balance sheet, Mo raises forecasted earnings by 4% to 9% for FY2026 to FY2028. With ASL trading at an “undemanding” P/E of around nine times of FY2027 forecasted earnings, she believes that the market has not priced in repair and chartering tailwinds and ASL’s pivot towards these two segments. Mo values ASL at 43 cents or 12 times P/E for FY2027 forecasted earnings, representing a slight discount to peers.
For Yon, he raises FY2026 and FY2027 profit forecasts for ASL to $33.1 million and $38.3 million respectively. He values the company’s shares at 45 cents orP/E of 12 times of estimated FY2027 earnings per share, also at a slight discount to peers.
