Otto Marine

Perhaps can buy Otto Marine at 7.1 cents as FA is improving. Poised for turnaround.

More rigs will drive demand for OSVs. There is a marginal increase in charter rates which will continue on tighter market conditions.

Closer to home, carbotage rulings have created attractive markets for both ship chartering and shipbuilding.

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Breaking out!

2Q net profit = US$16.8 m, has some one-offs, thus the operating net income was around US$10 m. Given the big chartering orderbook, can safely assume US$10 m for 3Q and 4Q. Taking into account US$14.4 m loss in 1Q, the full year could come in at US$22 m.

---> PE is S$300 m mrket cap divided by US$22 m (S$27.5 m) = 11X.

2015 will be a better year if assuming 1Q net profit = US$10m. The business, however, is evolving and the numbers will look different, I am sure.