Find out why Marco Polo Marine is shipping sector's 'rare gem'

Its US$4.5m earnings isn't among the reasons.

According to OSK, MPM is enjoying steady growth in its operations and bottom line, fuelled by an increasingly energy-hungry Indonesia. The growth profile combined with demonstrated technical superiority means the stock should enjoy a premium, yet it trades at 1.0x historical-cost book. MPM is a conviction call with a potential to double in 2-3 years.

Here's more from OSK:

Rare gem for its direct exposure to cabotage-protected, resource-rich Indonesia. MPM is one of the very rare companies which can safely operate in Indonesian waters, without running afoul of the strongly-enforced cabotage laws and without having to worry about local partners, by virtue of management’s nationality.

Indonesia, World #4 in population and the fastest-growing country in Southeast Asia, is an archipelago of 17,000 islands necessitating tug & barge services and endowed with offshore oil and gas reserves in both shallow and deep waters.

Technical capabilities top in class. MPM’s shipyard has delivered AHTS vessels with sustained bollard pulls averaging 15% in excess of the norm. Impressively, it recently outfitted a DP-3 vessel – a milestone usually reserved for established large yards. For a small company, this level of technical competence is remarkable. We like small companies with superior capabilities – these tend to appreciate strongly over the long term.

Associate PT BBR is listing today on the JSX. PT Bina Buana Raya, MPM’s 49%-owned associate, is listing today on the JSX. This will allow MPM to tap an alternative source of capital, much-needed in its capital-intensive growth strategy. We are forecasting BBR to grow at a 90% EPS CAGR for the three years to FY14F due to a fast-growing AHTS fleet, and 1H12 earnings of US$4.5m have already far exceeded the entire FY11’s US$2.6m.