In a July 20 report by analysts Tang Kai Jie and Heidi Mo, UOB Kay Hian (UOBKH) is retaining its “buy” rating at unchanged target price of 75 cents on offshore and marine counter Beng Kuang Marine after meeting its management recently.

Tang and Mo note the 1H2026 contract wins worth $85.2 million by Beng Kuang’s subsidiary Asian Sealand Offshore and Marine (ASOM). They also recognise the growing orderbook of around $70.7 million for ASOM and sister companies Nexus Engineering Indonesia and International Offshore Equipments.

Among management’s plans, UOBKH highlights how the company sees Guyana as a potential market to replicate its “successful” business in West Africa. Management also guided for one to two additional contracts per year for its floating, production, storage and offloading (FPSO) services, with FPSO count serving as a growth proxy.

Beng Kuang completed the acquisition of the remaining stake in ASOM at end-June and this is expected to significantly boost the firm’s 2HFY2026 revenue. The deal is earnings-accretive, enabling Beng Kuang to fully capture ASOM’s high-margin earnings while strengthening its core engineering segment.

For FY2025 ended Dec 31, Beng Kuang held cash and equivalents of around $37.4 million with approximately $10.5 million in borrowings. The company has been focused on paying down its debt, back by its strong cash flow from operations of $26.6m as at end-FY2025.

With the company continuing to shift towards an asset light operating model under its BKM 2.0 strategy,it is well-positioned to capitalise on any opportunities amid strong industry tailwinds.

Trading at around 9.2 times forecasted FY2027 P/E, Tang and Mo believe that Beng Kuang is currently undervalued as peers are trading at 11.8 times average. They value the counter at 75 cents, which is 14 times P/E or 1.5 standard deviations above historical averages and expect a re-rating as Beng Kuang continues to deepen its FPSO exposure and grow its orderbook.

The counter is trading at 52 cents, four cents or 8.3% higher, as at around 2.05 pm on July 20.