Shipbuilder, TAS Offshore Bhd has been on a great run in the past year, skyrocketing 143.5% to 56 sen on Jan 26. Interest in the counter was more pronounced in January when it hit a high of 61 sen, surpassing its net asset value of 54.7 sen as at Nov 30, 2023. This is more impressive coming from a low of 19 sen in July last year.

The buying interest for TAS Offshore is back and the upward momentum is likely to pick up further. Towards the upside, near-term resistance level is seen at 61 sen, followed by 65 sen.

On Jan 22, its wholly-owned subsidiary has secured shipbuilding contracts for three units of tugboats with a total value of RM22.6 million. The contracts were signed with an existing customer from Indonesia. These vessels are expected to be delivered in the third quarter of 2025.

The increased interest in the counter could be supported by better financial results. For the second quarter ended Nov 30, 2023, the company returned to the black with a net profit of RM4.5 million from a net loss of RM339,000. Its revenue rose to RM28.4 million from RM9.6 million due to more vessels were delivered.

TAS Offshore secured 27 new shipbuilding contracts worth about RM180mil in the 12-month period to May 31.

Moving forward, TAS Offshore remains optimistic about its prospects as it is well-positioned to benefit from the strong client base in Indonesia. As it is, the Indonesian Energy and Mineral Resources Ministry has raised its coal production target to reach 710 million tons in 2024.

Domestic consumption is expected to increase significantly in 2024 and Jakarta has set a domestic market obligation target at 220 million tons, which is sharply higher than 173.6 million tons in 2023.

Besides, Indonesia's world largest nickel reserves are making the country indispensable to the global electric vehicle industry. The demand from electric batteries is expected to account for one-third of total nickel demand by 2030, particularly as countries worldwide look to lower carbon emissions and meet their net-zero emission target.

The encouraging developments in the mining industry in Indonesia is expected to spur demand for more tugboats to support the inter-island transportation of bulk materials.

Such factors are deemed exciting for investors as the company steers itself to better growth and the share price will reflect its fundamentals.