Wednesday, January 21, 2009

2009年 20只备受瞩目的股项 :Malaysian Bulk Carriers Bhd (Maybulk) 大马散装货柜

Appeal lies in strong balance sheet

Malaysian Bulk Carriers Bhd (Maybulk) may not be on the shopping list of many analysts because the plunging prices on the Baltic Dry Index (BDI), which measures dry bulk shipping rates, will take a heavy toll on shipping companies.

Their concerns are not misplaced as dry bulk shipping rates have dived to a 22-year low, which in some ways is uncharted territory for many of the younger analysts. As the BDI dropped from its historical high of 11,793 in May 2008 to its current level of 770, the view taken by many was that the days of supernormal profits were gone.

Despite such pessimism, Maybulk has its appeal. It has a lot of cash and little borrowings on its balance sheet, which will help the company keep its head above the water in the current economic climate. Net cash per share is now at RM1.06, given the company's large cash pile of RM1.42 billion.
Of this, some RM802 million will be forked out for a 22% stake in PACC Offshore Services Holdings Pte Ltd (POSH), which it is buying from parent Pacific Carrier Ltd (PCL).

Considering the acquisition and lower earnings, OSK Research believes Maybulk could still afford to maintain a dividend yield of 9% (based on its share price of RM2.31) — a return that is substantially higher than a fixed deposit.

Furthermore, the 22% stake in POSH, a provider of offshore support vessel services for the oil and gas industry, could be a re-rating catalyst for Maybulk's share price in the future.

Some critics argue that the deal is pricey, but management defends the acquisition as being watertight, given that Maybulk has the option to sell back its POSH shares to PCL if the investment turns sour.

Instead of expanding capacity when the BDI was soaring, Maybulk, in the past two years, has been divesting itself of vessels at exceptionally high prices, which caused its cash reserves to swell. The investment in POSH enables it to indirectly expand its asset base as the latter is buying a fleet of vessels.

Management's foresight in building up a war chest augurs well for the company in the current downturn. Sceptics, however, are viewing the purchase of the stake in POSH suspiciously, which has caused its share price to fall. But at current prices and with good management, there is little downside for the stock.