$Mermaid Maritime (DU4.SG)$ CGS CIMB reiterate their Add cal...

CGS CIMB reiterate their Add call, with an unchanged TP of S$0.20, based on 11x 2025F P/E.

They hosted MMT's management for a call with investors on 7 Oct 24. Postcall, they remain positive on MMT's fleet utilisation and order outlook.

Key investor questions were focused on the impact of oil prices on day rates, margin outlook and capex needs.

Management expects fleet utilisation to remain above 80% in 2025F, on the back of tight global vessel supply and higher oil price-driven demand.

They see limited geopolitical risk to MMT as major areas of conflict in the Middle East are primarily concentrated in the western region of Saudi Arabia, while MMT operates predominantly in the eastern region and Qatar. The company may see some cost increases due to the need for alternative shipping routes when mobilising vessels from the UK or US to the Middle East. Management noted that higher oil prices are supporting increased development in Mozambique, Guyana and Asia-Pacific. Given its favourable order outlook, MMT expects fleet utilisation to remain well above 80% for 2025F. A continued high demand environment and limited vessel newbuilds should support day rates for its fleet, in their view.