Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

<p><i><b>These equity research reports are not written by the SGX.</b> SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</i></p><div>
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<p>INITIATION</p>
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<h2>Mermaid Maritime</h2>
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<h3>Can this mermaid survive the harsh dry summer?</h3>
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<p>Mermaid Maritime (MMT) specialises on subsea projects in the Offshore &amp; Marine (O&amp;M) sector.</p>
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<p>The collapse in oil prices due to Covid-19 has brought upon a harsh reality for offshore &amp; marine (O&amp;M) companies of all stripes, just when the sector was in the midst of recovering from the collapse in oil prices five years ago.</p>
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<p>MMT reported a net loss of US$10.3mn in 1Q20, widening from the US$4.1mn loss in the prior year period. Its saving grace is that it is going through this period with a strong balance sheet (its net gearing is at an industry low of only 0.05x).</p>
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<p><strong>Initiate with Neutral and 8.5 Sing cents fair value.</strong> MMT faces a challenging two years ahead of it, in our view. However, we see limited downside risk to its share price given that its current valuations is pricing in the worst case scenario. We estimate that at its current price, markets are discounting its 33.8%-owned rigs down to zero, while giving all its other assets a 30% discount. On a positive note, we see MMT as a decent value play if oil markets were to recover faster-than-anticipated in 2H 2020.</p>
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These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.



INITIATION




Mermaid Maritime



Can this mermaid survive the harsh dry summer?







Mermaid Maritime (MMT) specialises on subsea projects in the Offshore &amp; Marine (O&amp;M) sector.


The collapse in oil prices due to Covid-19 has brought upon a harsh reality for offshore &amp; marine (O&amp;M) companies of all stripes, just when the sector was in the midst of recovering from the collapse in oil prices five years ago.


MMT reported a net loss of US$10.3mn in 1Q20, widening from the US$4.1mn loss in the prior year period. Its saving grace is that it is going through this period with a strong balance sheet (its net gearing is at an industry low of only 0.05x).


Initiate with Neutral and 8.5 Sing cents fair value. MMT faces a challenging two years ahead of it, in our view. However, we see limited downside risk to its share price given that its current valuations is pricing in the worst case scenario. We estimate that at its current price, markets are discounting its 33.8%-owned rigs down to zero, while giving all its other assets a 30% discount. On a positive note, we see MMT as a decent value play if oil markets were to recover faster-than-anticipated in 2H 2020.

















Non-SGX Report: Mermaid Maritime: Can This Mermaid Survive the Harsh Dry Summer?