UOB KayHian downgrades Marco Polo Marine (5LY.SG) to Hold vs Buy, cuts target to $0.36 vs $0.53 after lowering FY11-FY12 earnings estimates by 33.5%-11.6%; expects margin pressure to persist in FY11.

"We believe FY10 margins were aided by project-specific shipyard work, which we believe to be unsustainable. We also expect weaker ship chartering margins to persist due to higher sale and leaseback expenses."

Suggests $0.30 entry price. Tips sharp improvement in vessel charter rates, operating margins as catalysts.

Shares +1.2% at $0.41.