- RE-ITERATE BUY Entry – 0.97 Target – 1.10 Stop Loss – 0.90
- Samudera Shipping Line Ltd. offers efficient and reliable container shipping services in the Middle East, Indian Sub-continent, South East Asia, Indo-China and the Far East markets.
- Container freight rates remained high in April. The lock-down of Shanghai had been more than a month. However, covid cases in Shanghai have yet subsided. The halt of Shanghai port operations benefited other shipping routes, especially those in Southeast Asia (SEA). The freight rates from SEA to North America in April stabilised at the high grounds.
Southeast Asia to North America Container Rates
Southeast Asia to North America Bunker Charges
Source: S&P Global
- FY21 results review. Revenue jumped by 51.5% YoY to US$527mn. Gross profit reached a record high of US$146.9mn compared to US$29.6mn in FY20. Net profit reached a record high of US$127.8mn compared to US$15.2mn in FY20. The company declared a special dividend of 12.75 SG cents (12.75% dividend yield as of the last closing price of S$1.0 last Friday) in February 2022.
- Positive outlook in the near term to mid-term. The global supply chain has been disrupted during the COVID-19 period, and it will be redesigned and redeployed moving forward as multinational companies have suffered from the concentration and geopolitical risks. The Southeast region will be the sweet spot for the manufacturing base alternative to China. Accordingly, the shipping boom will last in the longer run.
- Relatively cheap valuation. Currently, shares are trading at 3x P/E and 1.2x P/B.
(Source: Bloomberg)