Penguin International

[mslee888]

IFA considered Penguin offer fair and reasonable. 
Guess this round offeror should be successful since they already garnered 85.31% of total shares.

[dydx]

IFA considered Penguin offer fair and reasonable. 
Guess this round offeror should be successful since they already garnered 85.31% of total shares.

The IFA report shows a 31Dec22 Revalued Net Asset Value (RNAV) of $249.9m, inclusive a huge $49.4m revaluation surplus in Penguin's fleet of marketable vessels for charters with a combined market value of $164.9m (likely conservative) which is realisable. This gives a RNAV/share of $1.135, which is significantly higher - +36.7% - than the revised offer at $0.83. On this score alone, the revised offer is unattractive and inadequate. Think of it this way, why should a highly successful business with a growing international market reach be worth substantially less than is realisable net assets. Therefore, intuitively each Penguin share should be worth more than $1.135, and I am not inclined to sell my shares for less than that amount.

The IFA report does not include anything on future earnings - not even from existing new vessels construction contracts already secured from Miclyn Express Offshore (5 Flex-42X crewboats), Farra Marine (7 crew transport vessels), etc., and existing new vessels charter contracts including from Shell Singapore. All these important customer engagements and contracts are widely reported in social media like LinkedIn but not in company's announcements on SGX.

The IFA report also does not include information on Penguin's recent technological breakthrough into electric vessels with Shell Singapore as the first customer, as well as Singapore Government's directive on maritime decarbonisation in Singapore, for which Penguin is now already enjoying a first-mover advantage in a likely sweet-spot position to come, as all new harbour crafts in Singapore waters will be transformed from 2030 to being electric or other alternative energy powered.
https://www.mpa.gov.sg/media-centre/deta...-singapore
On this score alone, I am inclined to keep my Penguin shares for my grandchildren!

[ghchua]

Hi dydx,

If you refer to the term of reference on pages A-2 and A-3 of the IFA report, they have stated clearly the following two points which you have stated above and I summarize below.

1. They do not express any view on the growth prospects and earnings potential of the Company.
2. They will be relying on the disclosures and representations made by the Company on the value of the assets, liabilities and profitability of the Company.

To sum it up, it is not the job of an IFA to be an analyst to predict future earnings and give a target price for the stock. It is also not their job to look for announcements outside the domain beyond those given by the company.

[Shiyi]

Hi dydx,

If you refer to the term of reference on pages A-2 and A-3 of the IFA report, they have stated clearly the following two points which you have stated above and I summarize below.

1. They do not express any view on the growth prospects and earnings potential of the Company.
2. They will be relying on the disclosures and representations made by the Company on the value of the assets, liabilities and profitability of the Company.

To sum it up, it is not the job of an IFA to be an analyst to predict future earnings and give a target price for the stock. It is also not their job to look for announcements outside the domain beyond those given by the company.

Most companies have ignored the fact that shareholders are stakeholders too. It is particularly disappointing in the case of Penguin International. Judging from the low trading volume before privatization, I believe most of its shareholders have been holding the shares faithfully for quite some time.

[dydx]

Hi dydx,

If you refer to the term of reference on pages A-2 and A-3 of the IFA report, they have stated clearly the following two points which you have stated above and I summarize below.

1. They do not express any view on the growth prospects and earnings potential of the Company.
2. They will be relying on the disclosures and representations made by the Company on the value of the assets, liabilities and profitability of the Company.

To sum it up, it is not the job of an IFA to be an analyst to predict future earnings and give a target price for the stock. It is also not their job to look for announcements outside the domain beyond those given by the company.

So the IFA's "fair and reasonable" opinion on the offer at $0.83 is not very helpful then! In this case, minority shareholders now owning a decisive 15% remaining chunk of the business have to decide whether to sell their prized Penguin shares to the controlling shareholders - including the financially sharp Chairman (a trained accountant and seasoned investor), and a PE fund (Dymon Asia PE) behaving more like a financial vulture! - without guidance on even the underlying business's short-to-medium term prospects, including the potentially epochal transformation of the industry towards alternative and renewable energy sources. Are we talking about Penguin being similar to a "Tesla in the making" for small-to-mid size aluminium marine vessels? And the IDs also chose not to say anything to help the minority shareholders along.

Unless the offer is so attractive to account for at least the near-term (say 3 years') earnings and the additional value from the recent technological breakthrough, there are no valid economic reasons for me to sell my Penguin shares under the current circumstances.

[dydx]

The following LinkedIn reports on Penguin's recent business deals and current business evolution should be exciting for those who still hold Penguin shares..
https://www.linkedin.com/posts/miclyn-ex...er_desktop
https://www.linkedin.com/posts/martin-ri...member_ios
https://www.linkedin.com/feed/update/urn...2005376%29
https://www.linkedin.com/posts/incat-cro...member_ios
https://www.linkedin.com/feed/update/urn...2239234%29
https://www.linkedin.com/posts/shell_sin...member_ios

[dydx]

More exciting LinkedIn reports on Penguin..
https://www.linkedin.com/posts/sea-machi...er_desktop
https://www.linkedin.com/posts/toh-wee-k...er_desktop
https://www.linkedin.com/posts/ishak-kad...er_desktop
https://www.linkedin.com/posts/praxisaut...er_desktop
https://www.linkedin.com/posts/rashied-m...er_desktop

Is Penguin's business doing well after Covid? The answer is quite obvious!

[dydx]

Another 2 fire boats (repeat order) for SCDF to be delivered from mid-2025..
https://www.linkedin.com/posts/bmt_firea...er_desktop

[dydx]

Recent delivery of an award-winning hybrid-electric habour craft to MPA..
https://www.linkedin.com/posts/bmt_award...er_desktop

[brattzz]

Hi dydx,

If you refer to the term of reference on pages A-2 and A-3 of the IFA report, they have stated clearly the following two points which you have stated above and I summarize below.

1. They do not express any view on the growth prospects and earnings potential of the Company.
2. They will be relying on the disclosures and representations made by the Company on the value of the assets, liabilities and profitability of the Company.

To sum it up, it is not the job of an IFA to be an analyst to predict future earnings and give a target price for the stock. It is also not their job to look for announcements outside the domain beyond those given by the company.

So the IFA's "fair and reasonable" opinion on the offer at $0.83 is not very helpful then! In this case, minority shareholders now owning a decisive 15% remaining chunk of the business have to decide whether to sell their prized Penguin shares to the controlling shareholders - including the financially sharp Chairman (a trained accountant and seasoned investor), and a PE fund (Dymon Asia PE) behaving more like a financial vulture! - without guidance on even the underlying business's short-to-medium term prospects, including the potentially epochal transformation of the industry towards alternative and renewable energy sources. Are we talking about Penguin being similar to a "Tesla in the making" for small-to-mid size aluminium marine vessels? And the IDs also chose not to say anything to help the minority shareholders along.

Unless the offer is so attractive to account for at least the near-term (say 3 years') earnings and the additional value from the recent technological breakthrough, there are no valid economic reasons for me to sell my Penguin shares under the current circumstances.

totally! remember IFA is paid by company!

hold-on tight to your shares!!