Lim & Tan Securities has maintained its “buy” call on Grand Banks Yachts, with an upgraded target price of $1.05, from 54 cents previously.
The report dated Nov 25 comes after Grand Banks Yachts’ “stellar” 1QFY2025 ended Sept 30 results.
During the quarter, Grand Banks Yachts reported a revenue of $40 million and net profit of $5.4 million, a 29% and 95% y-o-y increase, respectively.
This was mainly attributed to a previously cancelled boat contract in 3QFY2024 that was resold in 1QFY2025.
This comes on the back of a stellar FY2024, where Grand Banks Yachts surpassed all expectations with a record-high revenue of $133.7 million and net profit of $21.4 million, representing a 17% and 112% y-o-y growth.
The company’s balance sheet remains healthy with net cash at $35.8 million, while its orderbook currently stands at $116 million. Grand Banks Yachts recorded seven new boat orders and two trade-in boat sales in 1QFY2025.
See also: With 300MW wind-solar project win in India, Sembcorp at 64% of 2028 renewable energy goal: CGSI
Lim & Tan Securities analysts Nicholas Yon and Chan En Jie note that the gradual decline in orderbook is not “particularly alarming” given that the company is more efficient in fulfilling its order book post-covid and at the same time, taking in new orders.
However, Yon and Chan recognise that the boat market typically softens during an election year in the US.
Yon and Chan note that Grand Banks Yachts has successfully built a strong brand by producing superior boats at competitive prices. With this advantage, the company aims to capture more market share in the US through its new range of boat models designed to appeal to previously untapped customer segments.
See also: PhillipCapital maintains ‘buy’ on Zixin Group Holdings; upgrades TP to 5.6 cents
Grand Banks Yachts is completing the construction of its facility expansion at Pasir Gudang, Malaysia, and will increase usable floor space by 25%.
The upcoming yard, which will be ready in December, will support this by enhancing efficiency, reducing lead times by 15% and allowing the company to strategically produce higher-margin stock boats.
Yon and Chan expect the full impact of this expansion and Grand Banks Yachts’ efforts to capture additional US market share to be realised in FY2026.
As at 2.03pm, shares in Grand Banks Yachts are trading flat at 55.5 cents.
