Penguin International

Interesting list. There was a time I had to choose FJ Benjamin, Old Chang Kee, and Bread Talk. All around 20-30 cents per share. Chose Bread Talk and OCK. I thought I was smart and sold BreadTalk at 50% profit due to their debt-to-equity; and large part of OCK at very good profit. Totally disregarded the nature and potential of business.

Back to Penguin. I am not sure how the list would affect the price. It's about governance, no? FJ Benjamin is on the list. Whether that list would put Penguin on the radar is another thing.
As contrarians/value investors (not simply doing the opposite. That's silly) I guess we often make unpopular decision with a brave face. But deep inside, we hope that one day the market will agree with us. I probably wont buy cheap and sell at fair value anymore - if the business is still growing, I will hopefully allowed to take a longer ride. Reminds me of Armstrong Industrial that won transparency awards, good biz and got delisted

FY 2014 AR is out: http://infopub.sgx.com/FileOpen/Penguin%...eID=342969

To quote some statements in the AR which i feel have indirectly answered some of your concern, but there is still more to be said so if you are heading for the agm, do raise it up with a different point of view, am sure they will be willing to take up the question:

1) "In the spirit of conservatism, we choose
to maintain a quiet confidence in word
and deed. That is why we choose to
make announcements that are in line with
regulatory requirements, with little fanfare. "

2) "On a practical level, the nature of our
shipbuilding business is largely based
on building for stock. Hence there is no
meaningful order book to talk about.
And we see no value to Penguin in
revealing exactly how many vessels
we are building or how many vessels
have been sold because it will signal
opportunities to our competitors"

3) "Come June 2015, we will mark yet
another milestone in our “Flex Your
Fleet” strategy when we deliver our
100th Flex crewboat – just two years
from delivering our 50th and 60th Flexes,
and nine years from our first."


1 cent dividend ( Ordinary + Special ) payable on 28 May 2015
http://infopub.sgx.com/FileOpen/Notice%2...eID=342973
http://infopub.sgx.com/FileOpen/Notice%2...eID=342972

Coming AGM on 28 April 11am, who's going?

To end off with this quote in the last page of Penguins AR, Keep calm and love PENGUINS!

Without any doubt, the quality aspects of Penguin's overall crewboat business - comprising new boats, own boats for chartering out, and repairs - are very high! I believe this has made Penguin's business and as a listed company a sustainable one for the long term. In quality aspects, Penguin is like a small, stand-alone marine or rig division in KepCorp - clearly of investment grade notwithstanding its small but fast-growing size.

I thought Penguin is adopting build-to-stock approach, and the inventories should comprise certain amount of "finished goods"? I have quickly browse through the accounts from FY2011 to FY2014 and don't see any finished goods as part of the inventories, but in fact the WIP for shipbuilding has increased tremendously from 8.7M to 56M just a three years apart. So it means that Penguin has been absorbing all excess stocks internally and capitalised the profit in to PPE? Is it a sustainable way of running business? Is it a proper way of accounting? Anyone care to clarify?

(10-04-2015, 10:10 AM)valuebuddies Wrote: I thought Penguin is adopting build-to-stock approach, and the inventories should comprise certain amount of "finished goods"? I have quickly browse through the accounts from FY2011 to FY2014 and don't see any finished goods as part of the inventories, but in fact the WIP for shipbuilding has increased tremendously from 8.7M to 56M just a three years apart. So it means that Penguin has been absorbing all excess stocks internally and capitalised the profit in to PPE? Is it a sustainable way of running business? Is it a proper way of accounting? Anyone care to clarify?

A quick answer to it, is part of the sale, has delivered to internal chartering segment. The "build-to-sock" means sell to internal fleet for chartering, rather than keep in "inventory", in the context of Penguin. You may notice that the PPE of chartering segment is rather stable, from 96 mil (2012) to 103 mil (2014). It is due to the fact that the segment also regularly disposing its fleet, while replenishing via internal order. It should be a sustainable model.

(10-04-2015, 08:56 AM)Stephentoh Wrote: Coming AGM on 28 April 11am, who's going?

To end off with this quote in the last page of Penguins AR, Keep calm and love PENGUINS!

I should be going let me know if u are too, is great to catch up with fellow shareholder.

I haven't participated much in this thread because I'm fairly confident of Penguin's resiliency. Would invest more if I had excess cash.

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(10-04-2015, 10:58 AM)thor666 Wrote:

(10-04-2015, 08:56 AM)Stephentoh Wrote: Coming AGM on 28 April 11am, who's going?

To end off with this quote in the last page of Penguins AR, Keep calm and love PENGUINS!

I should be going let me know if u are too, is great to catch up with fellow shareholder.

I haven't participated much in this thread because I'm fairly confident of Penguin's resiliency. Would invest more if I had excess cash.

Sent from my D5503 using Tapatalk

It would be great to meet fellow mates at the AGM, I should be heading down if there isn't any urgent task on hand, missed the last meeting.


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(10-04-2015, 10:23 AM)CityFarmer Wrote:

(10-04-2015, 10:10 AM)valuebuddies Wrote: I thought Penguin is adopting build-to-stock approach, and the inventories should comprise certain amount of "finished goods"? I have quickly browse through the accounts from FY2011 to FY2014 and don't see any finished goods as part of the inventories, but in fact the WIP for shipbuilding has increased tremendously from 8.7M to 56M just a three years apart. So it means that Penguin has been absorbing all excess stocks internally and capitalised the profit in to PPE? Is it a sustainable way of running business? Is it a proper way of accounting? Anyone care to clarify?

A quick answer to it, is part of the sale, has delivered to internal chartering segment. The "build-to-sock" means sell to internal fleet for chartering, rather than keep in "inventory", in the context of Penguin. You may notice that the PPE of chartering segment is rather stable, from 96 mil (2012) to 103 mil (2014). It is due to the fact that the segment also regularly disposing its fleet, while replenishing via internal order. It should be a sustainable model.

Thanks to clarify, but I think it is not wrong by saying that the business model is sustainable only if the general market demand for chartering/owning are positive, which is doubtful if the year 2015 because of the continuous slumps in the commodities prices. Who ever attending this coming AGM should consider to take the opportunity ask the management to shed some lights pertaining to their order book matter.

A few things to glimpse from Penguin's latest AR14.

a) "Record delivery of more than 20 Flex crewboats and ferries in 2014, an increase of more than 50% from the previous year, with a combined newbuilding capacity of 50 vessels a year from 1Q2015."
b) "Come June 2015, we will mark yet another milestone in our “Flex Your Fleet” strategy when we deliver our 100th Flex crewboat – just two years from delivering our 50th and 60th Flexes,"

What this means is that Penguin's first two quarter results will still be quite strong, revenue wise. Even if demand for its Flex crewboats deteriorates due to the low oil prices, Penguin is likely to still deliver the same revenue figure for Fy15 vis a vis Fy14. Hence I expect a similar full year EPS for FY15.

Beyond FY16, I do not think Penguin's demand will be hit dramatically and should be able to hit 70% of its yard capacity annually. Cashflow wise, CAPEX is likely to tone down with the completion of shipyards and concreting works at Batam. Therefore, expect CAPEX to be about 14M; Penguin will deliver 20M -25M of free cash flow, which can translate to the maintenance of 1 cent dividends (approx 6.6M as dividends dish out)

Penguin has no debt, but there is a "Other Payables and Accruals" of $36M which is about equivalent to the total cash. Anyone knows what is this accrual? Thanks.