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I find Marco Polo Marine, an offshore and marine company, a rather interesting proposition at current prices of 31.5c to 32.5c a share.
1. PER of about 8x
2. Net profit margin just under 20%
3. NAV per share at 37c
4. Interest cover ratio at 8.3x
5. Gearing at 30%
Marco Polo Marine has the intention of listing an Indonesian subsidiary on the Jakarta Stock Exchange. This could unlock value as Kim Eng estimates the listing could value the company's stake in the Indonesian subsidiary at more than 30% of the company's current market cap.
Perhaps, it is the persistent insider buying over the last 12 months that really nailed it for me here:
| Announce Date [Date of Effective Change] | Buyer/ Seller Name [Type*] | S/ W/ U ** | Bought/ (Sold) ('000) | Price ($) | |||
|---|---|---|---|---|---|---|---|
| After: No. of Shares ('000) *** | % Held *** | ||||||
| 05/06/12 [05/06/12] | LEE WAN TANG [DIR] | S | 1,095 | 0.325 | 195,311 | 57.02 | |
| 05/06/12 [05/06/12] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 95 | 0.325 | 191,399 | 56.17 | |
| 01/06/12 [01/06/12] | LEE WAN TANG [DIR] | S | 110 | 0.335 | 194,216 | 57.00 | |
| 01/06/12 [01/06/12] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 110 | 0.335 | 191,304 | 56.14 | |
| 16/05/12 [16/05/12] | LEE WAN TANG [DIR] | S | 114 | 0.340 | 194,106 | 56.96 | |
| 16/05/12 [16/05/12] | NAUTICAL INTERNATIONAL HOLDING LTD [SSH] | S | 114 | 0.340 | 191,194 | 56.11 | |
| 10/05/12 [10/05/12] | LEE WAN TANG [DIR] | S | 100 | 0.340 | 193,733 | 56.85 | |
| 10/05/12 [10/05/12] | NAUTICAL INTERNATIONAL HOLDING LTD [SSH] | S | 100 | 0.340 | 191,080 | 56.08 | |
| 15/12/11 [14/12/11] | LEE WAN TANG [DIR] | S | 159 | 0.335 | 193,892 | 56.90 | |
| 14/12/11 [13/12/11] | LEE WAN TANG [DIR] | S | 100 | 0.335 | 193,733 | 56.85 | |
| 05/12/11 [02/12/11] | LEE WAN TANG [DIR] | S | 100 | 0.341 | 193,633 | 56.83 | |
| 05/12/11 [02/12/11] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 100 | 0.341 | 190,980 | 56.05 | |
| 02/12/11 [02/12/11] | LEE WAN TANG [DIR] | S | 70 | 0.345 | 193,533 | 56.80 | |
| 02/12/11 [02/12/11] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 70 | 0.345 | 190,880 | 56.02 | |
| 28/11/11 [28/11/11] | LEE WAN TANG [DIR] | S | 11 | 0.330 | 193,463 | 56.77 | |
| 28/11/11 [28/11/11] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 11 | 0.330 | 190,810 | 56.00 | |
| 28/11/11 [25/11/11] | LEE WAN TANG [DIR] | S | 500 | 0.330 | 193,452 | 56.77 | |
| 28/11/11 [25/11/11] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 500 | 0.330 | 190,799 | 55.99 | |
| 07/09/11 [06/09/11] | LAI QIN ZHI [DIR] | S | 71 | 0.337 | 192,952 | 56.63 | |
| 07/09/11 [06/09/11] | LAI QIN ZHI [DIR] | S | 100 | 0.343 | 192,881 | 56.60 | |
| 07/09/11 [06/09/11] | LEE WAN TANG [DIR] | S | 71 | 0.337 | 192,952 | 56.62 | |
| 07/09/11 [06/09/11] | LEE WAN TANG [DIR] | S | 100 | 0.343 | 192,881 | 56.60 | |
| 07/09/11 [06/09/11] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 100 | 0.343 | 190,299 | 55.85 | |
| 05/09/11 [02/09/11] | LAI QIN ZHI [DIR] | S | 117 | 0.350 | 192,781 | 56.58 | |
| 05/09/11 [02/09/11] | LEE WAN TANG [DIR] | S | 117 | 0.350 | 192,781 | 56.58 | |
| 31/08/11 [29/08/11] | LEE WAN TANG [DIR] | S | 100 | 0.350 | 192,664 | 56.54 | |
| 31/08/11 [29/08/11] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 100 | - | 190,199 | 55.82 | |
| 29/08/11 [26/08/11] | LEE WAN TANG [DIR] | S | 64 | 0.345 | 192,564 | 56.51 | |
| 25/08/11 [25/08/11] | LEE WAN TANG [DIR] | S | 299 | 0.338 | 192,500 | 56.49 | |
| 25/08/11 [25/08/11] | NAUTICAL INTERNATIONAL HOLDINGS LTD [SSH] | S | 299 | - | 190,099 | 55.79 | |
| 24/08/11 [23/08/11] | LEE WAN TANG [DIR] | S | 50 | 0.340 | 192,201 | 56.41 | |
| 23/08/11 [22/08/11] | LEE WAN TANG [DIR] | S | 251 | 0.332 | 192,151 | 56.39 | |
| 22/08/11 [19/08/11] | LEE WAN TANG [DIR] | S | 170 | 0.333 | 191,900 | 56.32 | |
| 19/08/11 [18/08/11] | LEE WAN TANG [DIR] | S | 300 | 0.347 | 191,730 | 56.27 | |
| 21/06/11 [20/06/11] | LEE WAN TANG [DIR] | S | 100 | 0.374 | 191,430 | 56.18 | |
| 20/06/11 [17/06/11] | LEE WAN TANG [DIR] | S | 150 | 0.373 | 191,330 | 56.15 | |
| 16/06/11 [15/06/11] | LEE WAN TANG [DIR] | S | 120 | 0.376 | 191,180 | 56.10 | |
| 14/06/11 [13/06/11] | LEE WAN TANG [DIR] | S | 150 | 0.377 | 191,060 | 56.07 | |
| 10/06/11 [09/06/11] | LEE WAN TANG [DIR] | S | 100 | 0.386 | 190,910 | 56.02 | |
| 07/06/11 [06/06/11] | LEE WAN TANG [DIR] | S | 200 | 0.385 | 190,810 | 56.00 | |
Bloggy Award
13 comments:
Hi AK,
you sure these transactions are buys right? :)
Coz I'm not sure what the column S/ W/ U mean.
Hi Ray,
I was not able to include all the information in my blog because the column is not wide enough.
Here is the link to the relevant page on their website:
Insider Trades.
Thanks! Looks promising.
Hi Ray,
The numbers look good. Rather undervalued. Possible positive catalyst in the form of listing in Indonesia. Insiders keep buying.
This is one of those stocks which could demand a lot of patience from investors. Not suitable for trading, me thinks. ;)
haha... problem is when insider sells, do we know soon enough? but for the time being insider buying sounds very promising.
Hi Ray,
A friend told me many years ago that insider buying is more telling than insider selling. I tend to agree. :)
For people to part with money to buy into a company, there is only one logical reason.
For people to sell shares in a company, there could be many reasons why they are monetising their investments.
Marco Polo Marine (MPM)reported a 32% YoY fall in revenue to S$14.4m but saw a 104% rise in net profit to S$8.9m in 3QFY12, such that its results were above our expectations.
Higher gross profit margins and a reversal of share of losses in BBR helped to boost net profit by 110% QoQ. The group has seen an increase in enquiries for ship repair, outfitting and conversion services. As for the chartering side, MPM expects charter rates for offshore vessels as well as tugs and barges to remain stable.
We have tweaked our estimates to incorporate higher margin assumptions as well as BBR’s new functional currency.
Rolling over our valuation to 8x blended FY12/13F earnings, our fair value estimate rises to S$0.53 (prev. S$0.43).
Meanwhile, the stock has fallen by about 18% since its last high in mid Mar. Upgrade to BUY.
OCBC Investment Research, 7 Aug 12.
Lee Wan Tang buying more shares.
Bought 2,000,000 shares at 34c a piece on 22 August and prior to that, another 2,000,000 shares at 34c a piece on 14 August.
Is something brewing? A bumper dividend by year end, perhaps? ;)
Despite fears of a slowdown in the global economy, the rig market has picked up and the OSV market is on a gradual road of recovery.
According to IHS Petrodata and Clarksons’ estimates, the OSV to rig ratio is expected to start falling in 2013 after rising in the past few years. In particular, the ratio may fall below 3.9 by 2014 compared to 4.1 as at Mar 2012. This change, though somewhat limited, reflects a tilt in market balance that is in favour of vessel owners.
Marco Polo Marine generally have their OSVs working in the Asia Pacific (includes Australia).
(OCBC Research, 22 August 2012)
-----------------------------
Deliveries of anchor handling tug and supply (AHTS) vessels are expected to taper off in 2012 from 174 units to a low of 48 and 22 over the next two years, coinciding with a rise in utilisation levels across several exploration and production hot spots. A new upcycle has begun in the OSV sector, UOB writes.
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ASL Marine Holdings at 62.5c a share is already trading at a PER of 8.0x.
For Marco Polo Marine to trade at a PER of 8.0x, it would have to trade at a price of 53c a share, according to OCBC Research. Hmmm...
Marco Polo Marine has plans to list its 49% owned subsidiary PT Pelayaran Nasional Bina Buana Raya (“BBR”) on the Jakarta Stock Exchange. The objective is to “make BBR a financially self-sustaining enterprise and one of the avenues to achieve that is to seek a listing of BBR on a reputable regional stock exchange.” PT OSK Nusadana Securities have been appointed as the manager and lead underwriter for the fund raising exercise.
Pelayaran Nasional Bina Buana Raya wants to hold an initial public offering (IPO) in Jakarta this year in order to raise funds for expansion amid increasing demand for sea transportation, according to recent media reports.
Director Lie Ly said the Indonesian shipping company is aiming to pique investor interest in a December market debut comprising a fifth of its enlarged share capital.
“We will hold road shows [for the IPO] in Malaysia and Singapore and perhaps in Hong Kong,” Lie Ly noted, cited bythe Jakarta Post, before adding the group would use funds for refinancing a loan.
OSK Nusadana Securities and Dinamika Usaha Jaya are acting as underwriters for the flotation, according to Lie Ly’s mini expose reported in the press.
Indonesian National Shipowners Association chairperson Carmelita Hartoto told the Jakarta Post the country’s shipping business is growing: “Foreign shipping companies want to enter Indonesia’s market. They are looking for a new market following the crisis in their countries.
“If a shipping company wants to go public now, it means that the firm sees brighter business [opportunities] and is well liked. Therefore, it wants to raise funds to support expansion and grab a bigger share in the market.”
BBR was established and incorporated in 1998 in the Free Trade Zone of Batam of Indonesia’s Riau Province as a shipping agency company.
The company was initially involved in port pre-call vessel and cargo route planning, procurement and handling of supplies to vessels, clearing of customs, monitoring of vessel operations and managing port departure arrangements.
In the last five years it has focused and expanded into the ownership and chartering of vessels and currently operates a fleet of more than 30 tugboats and barges.
In 2010, BBR opened up its portfolio to include more sophisticated craft such as offshore support vessels, anchor handling tugs and supply in order to service the needs of the buoyant Indonesian offshore oil and gas sector.
The carrier’s client list includes Glencore International, Lafarge/Integra Mining, Holcim Singapore and Transpower Marine, as well as Padangbara Sukses Makmur and Sinar Energi Alam.
BBR is 49.0 per cent owned by Marco Polo Shipping, which is in turn held by Marco Polo Marine, a Mainboard-listed company on the Singapore exchange.
The group’s proposed IPO on the Jakarta Stock Exchange was first mooted in February 2012.
Zephus Ltd
17 September 2012
Hi AK,
Pardon me but how did you determine the gearing ratio 30% for MPM? Or rather, how would you determine the ratio based on the latest financial results?
Thanks
Hi K,
"A fundamental analysis ratio of a company's level of long-term debt compared to its equity capital. Gearing is expressed in percentage form."
Source: Investopedia.
As of December 2012:
Long term debt: S$20.46m.
Total equity: S$143.98m.
Gearing ratio: 14.21%
How did I get the number of 30% the last time? I am afraid I cannot remember and it looks like I could have made a mistake.
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