Penguin International

[kelvesy]

If one would visit www.penguin.com.sg, one would notice the logo "2014 Work Boat World - Best Support Vessel Builder" located at the top right. To have won a category - competing against many - is no simple feat. This is interesting because this magazine is widely read. This means Penguin is more recognised and could enjoy an uptick in business activity coming from new and old customers. And in as old as 2010, WorkBoat regarded a crew boat built by Penguin as being among the world's Top 20 Vessels.

Damen, another shipbuilder, won 'best overall builder of the year' the second time.

Launched in 1983, WORK BOAT WORLD quickly became and remains the world's best selling publication serving the global small ship market.
Covering all kinds of commercial and government non-cargo carrying vessels, its monthly issues provide incomparable coverage of news and views pertaining to working vessels of all kinds, shapes and sizes. These include:- tugs, ferries, fishing boats, patrol boats, pilot boats, aquaculture boats, rescue boats, offshore service vessels, tourist vessels, naval vessels, oil spill recovery craft, dredgers, oil rigs and all types of general and multi-purpose workboats.

The breadth and depth of its coverage is staggering and its content fascinating. Truly global, WORK BOAT WORLD covers all the world's most active centres of workboat activity, as well as vast numbers of small, out-of-the-way places where interesting things happen.

A number of new columns by world-leading experts have been added to WORK BOAT WORLD recently. This, combined with new features, have made the magazine even more interesting and useful.

WORK BOAT WORLD is aimed squarely at work boat owners and operators. It doesn't pretend to be anything else. Consequently, it is widely read, indeed devoured, by the vast majority of the major players in this increasingly global industry. Interestingly, a high proportion of those readers keep, file and frequently refer to their back copies of the magazine.

Since 2003, Baird Publications, the publisher of WORK BOAT WORLD, has been developing its very extensive BAIRD MARITIME website (www.bairdmaritime.com). This considerably enhances the utility of the magazine.

source:
http://www.bairdmaritime.com/index.php?o...Itemid=158
http://www.schiffswerft-diedrich.de/pres...f_2010.pdf
http://www.damen.com/~/media/nl/Images/N...wards.ashx

[CY09]

If we are to use Nam Cheong as a comparable to Penguin, Nam Cheong's full year results was 5.45 EPS and NAV of 23 cents. At current price of 32 cents, this means Nam Cheong is at a P/E of 5.87, P/B of 1.39 and div yield of 4.6%.

As explained Penguin's EPS is expected to be 5 cents, NAV of 21.5 and 1 cent dividend. On these metrics, I expect penguin to be about 29 cents. However, like the methodology of "Cap rate" used by property valuers, we have to adjust for their differences. Given Penguin's larger exposure to Africa, smaller market cap but strong balance sheet and lower payout ratio indicating prudence, I will adjust downwards by 5%. Therefore, Penguin should be about 27.5 cents if the FY results are within what I expect.

If we are to judge Penguin as a standalone, for the company to be selling at a forward P/E of 4.4 is something incredible. Its like the market seems to know Q4 earnings will be poor. If we assume Q4's EPS as zero, Penguin will be at a P/E of 5.7. However for a company whose earnings will grow at a moderate rate, to sell at P/E below 6, investors are definitely not overpaying for its growth.

Moving forward, it will be good if Penguin's mgmt can reveal their order books amount. This will enable us to keep a better gauge of its profitability.

<added more at 0.215>

[kelvesy]

CY09, have you written to their investor relations? But I have a feeling that Penguin management won't like to disclose their orderbooks....

[LocalOptimal]

If we are to use Nam Cheong as a comparable to Penguin, Nam Cheong's full year results was 5.45 EPS and NAV of 23 cents. At current price of 32 cents, this means Nam Cheong is at a P/E of 5.87, P/B of 1.39 and div yield of 4.6%.

As explained Penguin's EPS is expected to be 5 cents, NAV of 21.5 and 1 cent dividend. On these metrics, I expect penguin to be about 29 cents. However, like the methodology of "Cap rate" used by property valuers, we have to adjust for their differences. Given Penguin's larger exposure to Africa, smaller market cap but strong balance sheet and lower payout ratio indicating prudence, I will adjust downwards by 5%. Therefore, Penguin should be about 27.5 cents if the FY results are within what I expect.

If we are to judge Penguin as a standalone, for the company to be selling at a forward P/E of 4.4 is something incredible. Its like the market seems to know Q4 earnings will be poor. If we assume Q4's EPS as zero, Penguin will be at a P/E of 5.7. However for a company whose earnings will grow at a moderate rate, to sell at P/E below 6, investors are definitely not overpaying for its growth.

Moving forward, it will be good if Penguin's mgmt can reveal their order books amount. This will enable us to keep a better gauge of its profitability.

<added more at 0.215>

Been queuing at 0.215 for many days. Not many willing sellers.

[bear]

I have been queuing up for the past two weeks daily at 0.215 but unsuccessful at any further accumulation.This is not to say that I have not been accumulating Penguin stocks before that.

I have been accumulating Penguin steadily even since the oil price crashes in November 2014 which results in poor investors sentiments because I am a believer of the company's ability to weather through tough period due to its conservative management style and good range of products to fit non oil and gas customers as well.In the past 1-2 weeks the investors sentiments fallen again(I suspect due to the weak oil rebound beyond 50 dollars/barrel,as well as the Petrobras scandal and a series of recent analyst write-ups on the inevitably weak performance of the oil and gas sector for at least a few years) which sees this fundamentally strong stocks dropped to a delicious price of 0.215(although many investors felt that at this price it do not carry enough margin of safety),once again,hence I decided to set my price at 0.215 and purchase further more if there are enough sellers at that price(actually I am okay if I am unable to get more at 0.215 since I have accumulated a decent quantity before that).

Regarding the customer profile in the past few months and projecting in the next 1-2 years,especially in the current low oil environment with many Oil and Gas projects around the world halting/having their CAPEX cut,the weak price action in recent months suggests that perhaps the general investment community have no doubt that the FY2014 is able to hit a new record of EPS 5 cents based on past quarter financial results(and that record is achieved while the company's orders are achieved in FY2014,a bullish oil year for the first 8 months),but beyond that many investors are asking the questions whether in FY2015 will the company be able to achieve the same EPS 5 cents,and are there evidences to show this can be achieved is perhaps what is revolving in their minds for the past few months.

I am aware that due to the competition of the industry that Penguin International is in unable to disclose their order-book,because some of the companies are ongoing customers of their boats/ferries like Horizon ferries,and disclosing it pre-maturely may bring about the alert of fellow competitors.

Link:
http://www.maritime-executive.com/magazi...d-the-pond

From the 2015 boat review writeup it seems that besides Penguin's exposure to West Africa,there is increasing interest from private security companies in Europe.

I am not sure how if this is the information that Ms Wendy Laursen obtained after an interview with Mr James.

Recent portfolio that Penguin showcased in its website,besides the Horizon ferries and the Flex-40SL for a Malaysian offshore customer(again to other conservative investors this will be portrayed as a one off thing in FY2015 if they want to put great discount in the offshore customers' portfolio).

Hence,I believe that if Penguin showcase in their website in FY2015 of their first non-offshore operator and Ferries operator customers,such as a security firm,governmental regulatory department such as the marine police(though we cannot be too sure that they will be able to achieved this portfolio anytime soon),it will signal confidence to other potential investors and act as catalyst to crystalline its value that current investors current believe in,a strong fundamental firm providing “Crew Boat. Security Boat. Anytime. Anywhere.”

[BlueKelah]

all this talk of security boat is great and non-offshore related.

But what are the current companies providing such ships? Are they built by military defense firms? Surely it will get some licensing and defense contracts to get into the security boat manufacture scene? Will Penguin be able to break into this sector?

And just like SG property companies that have peaked with all the recent TOPs which is lagging what is happening in the sector, Penguin's order book could have peaked too and in a few years time the new factory may have overcapacity.

Just some risk to consider given that for NAV there is no MOS.
Div yield wise also no MOS.

Business wise O&G definitely down for this year at least. P/E may be looking good for now and next payout may get special dividend, but share price has also not been this high for a while. Was a couple years back below 10cents.

In case of extended stock market downturn or crash, would one be confident to hold and add to a position if penguin traded again at 10cents, especially given that dividend yield has been pretty low all along?

[NTL]

all this talk of security boat is great and non-offshore related.

But what are the current companies providing such ships? Are they built by military defense firms? Surely it will get some licensing and defense contracts to get into the security boat manufacture scene? Will Penguin be able to break into this sector?

And just like SG property companies that have peaked with all the recent TOPs which is lagging what is happening in the sector, Penguin's order book could have peaked too and in a few years time the new factory may have overcapacity.

Just some risk to consider given that for NAV there is no MOS.
Div yield wise also no MOS.

Business wise O&G definitely down for this year at least. P/E may be looking good for now and next payout may get special dividend, but share price has also not been this high for a while. Was a couple years back below 10cents.

In case of extended stock market downturn or crash, would one be confident to hold and add to a position if penguin traded again at 10cents, especially given that dividend yield has been pretty low all along?

I doubt Penguin will be building patrol boats outright. More like they are building boats that can be retrofitted for petrolling purpose. Maybe selling raw hull to ST, and ST fit the boat with all kind of military equipment and sell off to the users.

Something which I asked before, but didn't get an answer. Is aluminium hull good for fire fight? Imagine an aluminum boat comes contact with a steel boat, both showering one another with bullets. Who will be the likely winner?

While they argue that that they are unable to disclose the order book due to competition reason, I see many others doing it. So, what is so different with Penguin? Their business "cannot-see-light" (见不得光)? What I see is showing the order book is giving the minority shareholders the confidence in the company. Without showing, it only give the majority (or insiders) the advantage to know if things are going good or bad for the company.

[gzbkel]

Is aluminium hull good for fire fight? Imagine an aluminum boat comes contact with a steel boat, both showering one another with bullets. Who will be the likely winner?

According to this site, steel is better.
http://www.g2mil.com/aluminum.htm

But this sentence caught my attention:

It all to do with the ballistic threat levels, aluminum works best against small arms threats, once you start moving up to HMG's steel begins to gain an advantage.

Perhaps the FlexFighter is designed to go up against only poorly armed pirates with only small arms, and not regular militaries, and the reasoning is that aluminum is good enough.

Anyway it seems that aluminum is used in other military vehicles:
http://www.keytometals.com/Article102.htm

[BlueKelah]

all this talk of security boat is great and non-offshore related.

But what are the current companies providing such ships? Are they built by military defense firms? Surely it will get some licensing and defense contracts to get into the security boat manufacture scene? Will Penguin be able to break into this sector?

And just like SG property companies that have peaked with all the recent TOPs which is lagging what is happening in the sector, Penguin's order book could have peaked too and in a few years time the new factory may have overcapacity.

Just some risk to consider given that for NAV there is no MOS.
Div yield wise also no MOS.

Business wise O&G definitely down for this year at least. P/E may be looking good for now and next payout may get special dividend, but share price has also not been this high for a while. Was a couple years back below 10cents.

In case of extended stock market downturn or crash, would one be confident to hold and add to a position if penguin traded again at 10cents, especially given that dividend yield has been pretty low all along?

I doubt Penguin will be building patrol boats outright. More like they are building boats that can be retrofitted for petrolling purpose. Maybe selling raw hull to ST, and ST fit the boat with all kind of military equipment and sell off to the users.

Something which I asked before, but didn't get an answer. Is aluminium hull good for fire fight? Imagine an aluminum boat comes contact with a steel boat, both showering one another with bullets. Who will be the likely winner?

While they argue that that they are unable to disclose the order book due to competition reason, I see many others doing it. So, what is so different with Penguin? Their business "cannot-see-light" (见不得光)? What I see is showing the order book is giving the minority shareholders the confidence in the company. Without showing, it only give the majority (or insiders) the advantage to know if things are going good or bad for the company.

Order book probably mainly building and replenishing for their own fleet pelican offshore. Which if shown may indicate growth is largely from internal orders and not external.

Other possibility could be some indonesian clients which are shady, maybe even linked to pirate groups? Pirates do need fast boats for their work, wouldnt they be considering flex boats?

But pure speculation on above, facts wise other than earnings and potential growth and debt free, there is not really any other MOS to fall back on. This is after all a very small cap company with a rather opmi unfriendly management so far.





via Galaxy Tab S with Tapatalk

[NTL]

all this talk of security boat is great and non-offshore related.

But what are the current companies providing such ships? Are they built by military defense firms? Surely it will get some licensing and defense contracts to get into the security boat manufacture scene? Will Penguin be able to break into this sector?

And just like SG property companies that have peaked with all the recent TOPs which is lagging what is happening in the sector, Penguin's order book could have peaked too and in a few years time the new factory may have overcapacity.

Just some risk to consider given that for NAV there is no MOS.
Div yield wise also no MOS.

Business wise O&G definitely down for this year at least. P/E may be looking good for now and next payout may get special dividend, but share price has also not been this high for a while. Was a couple years back below 10cents.

In case of extended stock market downturn or crash, would one be confident to hold and add to a position if penguin traded again at 10cents, especially given that dividend yield has been pretty low all along?

I doubt Penguin will be building patrol boats outright. More like they are building boats that can be retrofitted for petrolling purpose. Maybe selling raw hull to ST, and ST fit the boat with all kind of military equipment and sell off to the users.

Something which I asked before, but didn't get an answer. Is aluminium hull good for fire fight? Imagine an aluminum boat comes contact with a steel boat, both showering one another with bullets. Who will be the likely winner?

While they argue that that they are unable to disclose the order book due to competition reason, I see many others doing it. So, what is so different with Penguin? Their business "cannot-see-light" (见不得光)? What I see is showing the order book is giving the minority shareholders the confidence in the company. Without showing, it only give the majority (or insiders) the advantage to know if things are going good or bad for the company.

Order book probably mainly building and replenishing for their own fleet pelican offshore. Which if shown may indicate growth is largely from internal orders and not external.

Other possibility could be some indonesian clients which are shady, maybe even linked to pirate groups? Pirates do need fast boats for their work, wouldnt they be considering flex boats?

But pure speculation on above, facts wise other than earnings and potential growth and debt free, there is not really any other MOS to fall back on. This is after all a very small cap company with a rather opmi unfriendly management so far.





via Galaxy Tab S with Tapatalk

Looking at ASL's latest statement, the posted "As at 31 December 2014, the Group had an outstanding shipbuilding order book from external customers of approximately $270 million for 21 vessels with progressive deliveries up to second quarter of FY2017."

Can't Penguin has a similar statement just for external customers? Does all these other boat builders losing their competitiveness by announcing such order book? Good or bad, everyone can see.

As a Singaporean, I certanly hope not to see a Singapore company producing boats for pirates. Let's hope this will not be true.