Samudera Shipping

[kagemusha]

Hi all,

Starting this thread on Samudera Shipping, surprised that it is not already available.

Came across this counter while doing some study on SSC.

Some preliminary findings, please feel free to add or comment

Upside

1. Looks like a genuine turnaround story, comparing 2013 to 2014 results
2. Revenue is down by about $8m but profit is up by $7m.
3. No huge one off item, except a disposal of investment ($1m more than 2013)
4. Administrative expense went down
5. Operating profit is up $5m comparing to loss of $2.x m in 2013, forex gain account for $800k, compare to $200k in 2013
6. Huge margin of safety comparing to its current price
7. Sitting on $36m cash

Downside

1. Overall shipping is in down cycle (can be an upside as well, making $ in down cycle)
2. Not sure if sustainable
3. Operating in Indonesian market (can be disruptive - pirates, political turmoil etc)

Overall, I like the story, the signs seems positive.
Anything I should take note of?? before I plough in $$??

Thanks in advance

[merxantia]

The challenge with container shipping (which is the space that Samudera operates in) is cyclical and has been largely in a slump despite the occasional uplift in BDI here and there.

Based on that, it is largely difficult to predict the visibility of the earnings for this company (especially in the Indonesian charter space that it operates in) other than the attraction of the big discount to NAV.

So in summary, it may turn out to be a long wait for this to turn around. My 2 cts.

[Gaudente]

The turnaround there has been for sure, but it appears to be already reflected in current quote , that jumped from 14 to 17 cents after the announcement and then just stayed there.
The low P/BV ratio is attractive, but how can we know if vessels are valued at current price ? It might be like Rickmers that has a similar ratio, but only because it never devalued vessels to market price.
And about the 35 millions cash, please remember they still owe 150 millions to banks

[kagemusha]

oh sorry, just realised that this is posted to the HK thread, moderator please help move this to SG thread, thks in advance.

[kagemusha]

Thks so much for your input.
Noted on the $125m that they still owe.
I also note that they have repaid about $12m for last year, so assuming straightline, repayment should clear in 10 yrs.
The devaluing of vessels is a black box, so no way of knowing except that the assets are reduced by $10m from last year.
I think assuming even if they overstate the value of their vessels, by 20-30% (conjecture), the margin of safety though reduced, might still be significant?

[kagemusha]

looks like some people love the story too... up 3 cents liao.

[Behappyalways]

For those value investors, you might want to take a closer look at this company. Read the latest annual report (2013). Go thru its previous announcements.

Do your homework and make your own decision if it is a good buy.........

[GiraffeValue]

PPE 313 918
Cash 40 628
Net receivable 34 105

sub :388 651

Loan 135
L/t 119 014
s/t 23 903

sub : (143 052)

245559/538038 = $0.456.

Give a 30% discount on PPE = $0.281(current traded price)

- No consistent div payout
- No insider buying.

Conclusion : More evidences required to build a case.

[Behappyalways]

You are hardworking. The company is trading way below nta and some assets are undervalued but that is not the reason to buy although it is a plus. Try predicting its earnings ^^

[kelvesy]

I see how Joko Widodo is imposing tough stance on pirates and many sea disputes. This could bode well for the industry since it would be more stable in the future. Jokowi's minister for maritime affairs is also a very hands on person.

Indonesia wants to be a maritime superpower, this may boost more traffic to indonesia waters and perhaps Samudera Shipping could benefit from it.

I have wrote in to their investor relations to seek clarifications on their assets - cost price, market price, and last valued when.