$SEALINK / 5145 (SEALINK INTERNATIONAL BERHAD)
Research by HLIB
Non Rated - TP RM0.52

"Staging a huge comeback"

Sealink owns 19 active OSVs that are mainly chartered to the O&G industry, and provides shipbuilding and repair services. FY23 blended fleet utilisation was about 60% in FY23 and we believe it will trend upward to over 68% in FY24, driven by the robust offshore maintenance activities amidst an acute shortage of Malaysian-flagged OSVs. Sealink is aiming to secure a few vessels to be chartered under the POV program. Nearly all vessels are currently chartered under spot rates, until the POV awards are officially concluded. We expect Sealink to return to black in FY24f, backed by higher utilisation rate at 68% and blended DCR of RM30k/day. We value Sealink at RM0.52 based on 10x mid-FY25 EPS, a discount to 14x PE that we typically ascribe to OGSE players. We view Sealink as a laggard in the OSV space due to its undemanding valuation amids an imminent earnings upcycle. Sealink is currently trading at 7x FY24f earnings.

Analyst:
Brian Chin
brianchy@hlib.hongleong.com.my