Jaya Holdings

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#21
This report is probably the first comprehensive one in a long while since Jaya's renewed focus by a new controlling shareholder.

If you have a good look into Jaya's latest annual report for FY ending Jun 12, the company has stated that they will step up their reach to the investment community. The timing of the report is significant as it is coming on the back of the emergence of the fruits of new initiatives embarked - (i) sustainability of recurrent income via raising utilisation rates of owned vessels (ii) scaling back and tailing off speculative new builds (in the final 20 months in the words of management (iii) potential new contract flows from alliance with Dutch based IHC-Merwede.

The main positives that one can look forward to are as follows:

(i) new controlling holders raising their stakes progressively from their initial 54.7% to 61.17% via a series of open mkt purchases;
(ii) appointment of experienced key personnels that is already showing key results in each of the core division - chartering and ship building/repairs. This is unlike the previous fund manager that continued with the old business model and mgt that eventually ran aground;
(iii) benefiting from the austerity imposed by banks in debt restructuring during the last few years. Now that they have successfully refinanced the old debt, Jaya has negligible net debt unlike peers Ezra and Swiber that is highly geared. The low debt levels will enable them to capture emerging opportunities and resume dividend payments.

I am personally excited by this turnaround story. Apart from the debt injunctions that resulted in the offloading of speculative buildings which resulted in a substantially stronger balance sheet, Jaya has been profitable even in the dark ages.

With a clean slate, clear business directions with experienced personnel in charged to steer towards the right directions, Jaya minorities can expect more investor friendly approaches by the company to enhance shareholders wealth. Given that Jaya is currently trading below book value, I think the first stage of rerating will be towards the book value. As the analyst community has a tendency to be fashionable, we could well be looking for similar recommendations as mgt re-iterate their renewed focus to the analysts.

Vested


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#22
the old model is not that bad. It was bad because the previous fund ran it too aggressively. Jaya's old business model helped it to grow a lot before 2007.

I think that the new management should not abandon the old business model completely. They should continue to sell their existing vessels and build new vessels to replace those sold to improve its yard utilization, rather than just to build a larger and larger internal fleet, but limit speculative build to a certain extent.

Chartering business is not recession proof. oversupply is still a potential risk.

Not many offshore players can replicate Jaya's way of doing business(build-sale-build, build-own-lease-sale-build...) with its kind of balance sheet.
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#23
hi Freedom,

I agree with your analysis. However, it appears that mgt has clearly spelled out the direction. Hence the strategic alliance with IHC-Merwede to fill the slack that is previously used for the ship-chartering division and speculative builds (when internal vessel demand is insufficient).

Speculative builds can be very lucrative when the market is in a bull phase (where there is a lot of money chasing limited supplies). Looking at the present problematic global economic climate, the strategic re-positioning to that of a contract based building and repairs is a more stable model. I think even bankers are more confident of working capital financing as oppose to capex related financing.

The ability to present a more stable business plan will help secure financing from a global banking industry that is highly selective of borrowers. Being a bank backed substantial holder certainly helps Jaya to restructure their business model in order to start afresh.

Overall, i would expect more engagement with the investment community from Jaya (as clearly spelt out in the annual report) once the IHC-Merwede alliance takeoffs. For industry publications to be able to quote on contract value - there must already be works in the pipeline. Akan Datang


(22-12-2012, 09:15 AM)freedom Wrote: the old model is not that bad. It was bad because the previous fund ran it too aggressively. Jaya's old business model helped it to grow a lot before 2007.

I think that the new management should not abandon the old business model completely. They should continue to sell their existing vessels and build new vessels to replace those sold to improve its yard utilization, rather than just to build a larger and larger internal fleet, but limit speculative build to a certain extent.

Chartering business is not recession proof. oversupply is still a potential risk.

Not many offshore players can replicate Jaya's way of doing business(build-sale-build, build-own-lease-sale-build...) with its kind of balance sheet.
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#24
Jaya ended at 65 today, on the verge of breaching another major resistance around 65.5 after clearing 61.5 convincingly today.

Jaya's latest upward move was the result of DBS Sec re-instatement of coverage last Friday. After 3 market days of digestion of the trading volume last Friday, today's move is positive and indicative of buyers belief in both Jaya's intended roadmap and DBS Sec's analysis.

This is a turnaround story well supported by Jaya's financial strength (post the last few years' austerity) and the new direction charted by new management.

Next major resistance around 75 and 81.

GG
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#25
Jaya, IHC Merwede launch new PSV design

http://www.seatrade-asia.com/news-headli...f-psv.html

http://seashipnews.com/news_content.php?fid=3w3c544
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#26
Thanks for the info Thinknotleft.

There was no announcement on their website. I'll have thought such news should also be put in the newsroom or something.


thanks for the news below.
(31-01-2013, 06:55 AM)thinknotleft Wrote: Jaya, IHC Merwede launch new PSV design

http://www.seatrade-asia.com/news-headli...f-psv.html

http://seashipnews.com/news_content.php?fid=3w3c544
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#27
strategic review initiated. it seems that the private equities are trying to cash out.
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#28
The interims dividend of 0.5c and final dividend of 3.5c seems to be the work of PE to recoup their investment.
(10-09-2013, 09:14 PM)freedom Wrote: strategic review initiated. it seems that the private equities are trying to cash out.
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#29
(11-09-2013, 09:57 AM)guru Wrote: The interims dividend of 0.5c and final dividend of 3.5c seems to be the work of PE to recoup their investment.
(10-09-2013, 09:14 PM)freedom Wrote: strategic review initiated. it seems that the private equities are trying to cash out.

Even without PEs' push, Jaya has not problem to pay such dividends with its loan covenant removed.
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#30
Today volume more than 29m and share price went up by 3 cents. What is the message??
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