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Marco Polo Marine: Patience will be rewarded.

Tuesday, November 27, 2012

I added to my long position in Marco Polo Marine as long term support was tested. Today, its share price touched a high of 35c before closing at 34.5c on the back of rather high volume. The positive divergence between the CMF and price action has played out. The MACD is rising in the negative territory and we could see price going higher and momentum going positive once more. A retest of 37c, the high of the double top, could happen.

Daily chart.

Weekly chart.

Fundamentally, Marco Polo Marine presented an impressive set of numbers:



All-time high net profit of S$21.3 million against consecutive 8 years of record high revenue at S$89.8 million and record high gross profit at S$29.2 million for FY2012.


Record gross profit and net profit attained with margins at enhanced levels of 32.5% and 23.8% for FY2012, representing increases of 4.4% points and 3.0% points over FY2011 respectively.

Operating cashflow position reversed from a net cashflow used in operations to a net cashflow generated from operations of S$34.5 million in FY2012.


EPS of about 6.3 Singapore cents for FY2012, representing an increase of 23.5% over FY2011, while NAV per share increased by 14.4% to 41.4 Singapore cents as at 30 September 2012.

Declaration of a special interim dividend of 0.8 Singapore cents per share for Q1 FY2013.

See: Media Release.

In earlier blog posts, I stated my reasons for believing that Marco Polo Marine's share price is too low and that we could see a much higher price over time.

If we expect Marco Polo Marine's shares to trade at similar valuation to its peers, a PE of 8x would value each share at 50.4c. This implies a 46% gain from the last closing price of 34.5c.

Patience will be rewarded.

Related post:
Marco Polo Marine: Accumulation mode.


16 comments:

Cory said...

Kind of surprise on the turnaround to new business under difficult shipping industry conditions and made it.

Can help share some light what's so different is Marco Polo from other sip building companies that allow it to succeed better than the rest ?

Ray said...

ha ha, i was looking at the chart thinking its about time it move back again. am glad it did.

AK71 said...

Hi Cory,

I have some clients in the ship repair industry and since last year they have been kept very busy.

The persistent and significant insider buying at Marco Polo Marine intrigued me. So, I decided to find out more. That started me buying.

Look at my older blog posts on Marco Polo Marine and their comments sections as well to see why Marco Polo Marine's share price has room to rise. :)

AK71 said...

Hi Ray,

For Marco Polo Marine, I am all buckled up for a longer ride. So, I keep an eye on the weekly chart. As long as there is support, higher lows and no sign of any negative divergence, I stay invested.

Fundamentals are good and technicals are benign. :)

AK71 said...

Marco Polo Marine: Increasing its exposure to the offshore sector
Marco Polo Marine (MPM) reported a 3% YoY fall in revenue to S$19.8m and a 10% increase in net profit to S$3.9m in 4Q12, bringing full year revenue and net profit to S$89.8m and S$21.3m, respectively. Results were in line with our expectations; full year net profit was exactly what we had forecasted earlier. As for the long-awaited BBR listing, we think there is a possibility of it coming through in the coming months. We expect its offshore vessel fleet to grow while BBR downsizes its tugs and barges fleet. Meanwhile the ship repair business remains healthy while charter rates are expected to be stable. Rolling forward to FY13 earnings with an unchanged peg of 8x, our fair value estimate rises from S$0.53 to S$0.56. Maintain BUY.
OCBC Research.

AK71 said...

ASL Marine is a larger peer of Marco Polo Marine and has the following numbers for 2012:

EPS: 7.7c
Net margin: 8.3%

Gearing: 43%
NAV/share: 84.4c

Last closing price: 64c.
PER: 8.31x

JCK said...

Nice results!

Caught some 50,000 shares sometime back approx 33.5 cents....good luck! :)

AK71 said...

Hi JCK,

You got in at a good price, I'd say. Indeed, good luck to both of us. :)

AK71 said...

REGISTRATION FOR AN INITIAL PUBLIC OFFERING OF SHARES (“IPO”) ON THE INDONESIA STOCK EXCHANGE (“IDX”) BY PT PELAYARAN NASIONAL BINA BUANA RAYA Tbk. (“BBR”), A 49%-OWNED ASSOCIATED COMPANY OF MARCO POLO MARINE LTD (THE “COMPANY”) (THE
“IPO REGISTRATION”)

Reference is made to paragraph 3.2(a)(ii) of the shareholders’ circular of Marco Polo Marine Ltd (the “Company”) dated 1 April 2011, announcement dated 20 February 2012 and 25 September 2012 in relation to the Proposed Listing.

The Board of Directors of the Company would like to inform that BBR has obtained the pre-effective
letter of BBR's initial public offering ("IPO") registration statement from Capital Market supervisory Agency (“Bapepam-LK”) which instructs BBR to publish its abridge prospectus and do the bookbuilding in relation with the BBR’s IPO.


http://marcopolo.listedcompany.com/newsroom/20121205_073447_5LY_AF2B55478CFB777848257ACA0080B606.1.pdf

Banzai said...

Hi Ak,

What is the correct special dividend for Marco? The site says 0.008 per share but your blog says 0.8 cents per share.

Cheers,
Banzai

AK71 said...

Hi Banzai,

$0.008 per share is 0.8 cents per share. :)

caleb Khoo said...

Got some at 0.34. Thought of getting some more too but not sure what price to enter. What do you suggest?

Anyway, what is your email address? Need to ask you some stuff.

Thanks
Pie

AK71 said...

Hi Pie,

Something totally unrelated: I watched "Life of Pi". I enjoyed it. Very thought provoking. :)

What do I suggest? Nothing. Hahaha.. I would never suggest to any reader to buy or to sell. You have to arrive at your own decision.

Ask yourself what is your motivation for investing in Marco Polo Marine. When you know clearly what you want out of your investment, you would know what to do. :)

You are welcome to send me emails. Just go to the header of this blog and you will find it. Click on "Contact AK". ;)

caleb Khoo said...

not sure why, but I could not get your email address when I click that.

AK71 said...

Hi Caleb,

That is strange. I just tested the link. It works. Anyway, my email address is: ak71@sillypore.com

AK71 said...

AN ASSOCIATE company of marine logistics group Marco Polo Marine has moved a step closer to its planned listing after receiving approval from Indonesia's capital market regulator.

PT Pelayaran Nasional Bina Buana Raya (BBR) is now looking to list on the Indonesia Stock Exchange on Jan 9 in the coming year, after Indonesia's Capital Market and Financial Institution supervisory agency, known as Bapepam-LK, gave its approval to the firm for the initial public offering.

BBR is 49 per cent owned by Marco Polo Marine. The firm has two business divisions: tugs and barges, which is in the business of transporting commodities including coal and iron ore; and offshore marine logistics, which represents its efforts to ride on the buoyant offshore oil and gas sector in Indonesia.

Some of its customers include commodities giant Glencore International, Lafarge/Integra Mining, and Holcim Singapore, according to its website.


Business Times, 25 Dec 12

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