“With the full early redemption of the bonds, this non-cash amortisation will largely disappear, resulting in cleaner and stronger profitability in FY2026,” he notes. These losses are likely to taper off significantly from 1HFY2026 onwards.
Lim & Tan Securities analyst Nicholas Yon has initiated coverage on ASL Marine with a “buy” call and a target price of 30 cents. Yon’s target price is pegged to an FY2027 P/E of 9.5 times and represents an upside of 39.5% to ASL Marine’s share price of 21.5 cents as at the close of Oct 13.
In his Oct 14 report, Yon likes ASL Marine’s management team, which has a “strong track record of integrity and financial discipline”, given that the company has consistently met all of its debt obligations without resorting to “loan haircuts”. Yon was referring to ASL’s inability to fully redeem a bond in 2019. The company had instead opted to extend its bond maturity by five years. “This restructuring required ASL to recognise a fair value gain at the time, which was subsequently amortised over the life of the bond and thus impacted earnings.”
