Their confidence in Beng Kuang is driven by a combination of factors. Firstly, at the business level, Beng Kuang has announced a proposal to acquire the remaining 49% stake it does not own in its 51%-owned subsidiary, Asian Sealand Offshore and Marine (ASOM), for $60 million. The subsidiary offers a comprehensive range of services to O&M assets, including maintenance, repair and inspection.
On the back of successful execution of business strategies to enhance shareholder value and sector tailwinds, Lim and Tan Securities have initiated coverage on Beng Kuang Marine with a “buy” rating at target price of 53.5 cents.
In their March 31 report, Nicholas Yon and Chan En Jie note that CEO Yong Jiunn Run has turned around the company from a lost-making leveraged shipyard operator into a profitable asset-light offshore and marine (O&M) service provider. They observe that the company has pivoted from capital-intensive shipyard operations to higher-margin recurring services.
