Pity. This company is no longer the same company as it was 10-18 years ago. Last annual report showed it only has 3 vessels left. Customer concentration risks are high. Market cap is only RM305 million - a small company, no longer a shade of what it was 10-18 years ago.
Last Balance sheet showed 19+ sen cash. NTA 52 sen. Trading at 30.5 sen, so, undervalued by P/NTA basis and interesting. However, business appears fairly valued (?). My estimate of 1 year EPS is around 1.2 sen. Excluding cash, the business is available for sale at 30.5 sen - 19 sen = 11.5 sen i.e. P/E of < 10, which is very fair for the future earnings from the 3 vessels. Total cash is around 190 million + meaning they can't scale / grow their business in the future - if they use the entire 190 million to buy 2-3 vessels, that cash is gone. If they pay out the 190 million + cash as dividends, market is going to drop down ex-div. We already seen that market is pricing fairly - on the last ex-div date, price fell 1.5 sen, exactly equal to the dividend paid out. At this juncture, this is now a penny stock with little upside / downside prospect.
It's not clear to me what happened to MAYBULK. I haven't monitored for over a decade and suddenly noticed this business is nothing like the business that it was 10-18 years ago. It looks to me this company is now ceasing / substantially reducing market's interest.
If you are a Book Value investor and are very patient, perhaps accumulating at low prices and hoping for a price spike to sell out may work out, but this can test even the most patient investors. Keep such plays a small % of one's capital.
For me, my rule is that the dividends must be funded by a % of earnings. If EPS is 1.2 sen and DPS is 1 sen, that's 3.3% of 30 sen price which is similar to FD rates and doesn't beat EPF, so, I'll pass. Sure, I'll grant that MAYBULK might use some of its cash to enhance the DPS to be larger than 1 sen, however, it will reduce its cash and limits its future ability to grow its fleets i.e. the more cash it distributes as dividends, the less chance it can grow its business in the future.
Just documenting my thoughts here for my own future reference to remind me to pass this trade.
History of Maybulk 2Ys & Goh bot fr Robert Kuok, while stock @ 0.54 in 2022 April. 2Ys sold to Goh @0.425 a year after.
Core biz: Shipping, profit margin 20-25%. Biz nature is a CYCLE biz.
Latest exercises: ~Capital reduction on 23Q3 ~Venturing into shelving and storage biz, with profit margin ~13% ~Ship sale at 140m on Nov 2023, which will be in 23Q4 (estimate on end of February)
Attractive Points: ~capital reduction, which will turn Maybulk to new reborn company from accounting stabd point of view ~After ship disposal, balance ships has long term orders, which will generate stable income ~potential spwcial dividend of 0.10 ~Dividend payout ~100% @0.01 with the yield 3% @0.33 ~NTA 0.52 ~almost zero debt, 1m ~Cash cash 29m + deposit 162m , + ship sale deal 140m, which translate into 330m, if no loss no gain for coming qtr. this is talking about 0.33 cash per share, which is below the current price 0.325 ~Value relization theme ~Estimate normal annual Net Profit 5-10m, EPS 0.005-0.01. If value the biz at PE 10, this translate into 0.10 for current biz
Target Buy Price: Target Sell Price: =cash 0.33 + current biz value 0.10 + potential special dividend 0.10 = 0.53
Dear Shareholders, We wish to inform that the Circular in relation to the following proposals dated 10 May 2024 is available at www.maybulk.com.my for your preview: (i) Proposed Share Buy-Back Authority of up to 10% of the total number of issued shares of the Company; and
(ii) Proposed Exemption under subparagraph 4.15(1) of the Rules on Take-overs, Mergers and Compulsory Acquisition to Dato' Goh Cheng Huat and person acting in concert with him from the obligation to undertake a Mandatory Take-Over Offer for all the remaining ordinary shares in Maybulk not already owned by them arising from the purchase by Maybulk of its own shares pursuant to the proposed Share Buy-Back Authority. If you need a copy of the printed Circular to Shareholders or should you require any assistance on the above, kindly send the request to enquiries@maybulk.com.my
only fleet and signed long term contract , that is why share price cannot go up eventhough now freight price is sky rocket now ,i guess management dint expected that , anyway , the currency exchange rate cause the lose , will keep in watchlist this under value stock , sell the ship and see what is the management next move to invest to generate good return in other thing....
Brother @Alex_Kho, please don't simply create article that can misleading investor ya.
MAYBULK has already sold most of its vessel, now left only 1 vessel. And this vessel has been chartered to customer at fixed rate long term contract, so the fluctuation in shipping rate will not have impact on MAYBULK.
Technically, MAYBULK is no longer a shipping / Logistic company, now its main business is manufacturing of the steel racking system.
Revenue and profit from the shipping bulkers segment is expected to be stable throughout the year 2024 as the only remaining vessel, Alam Kuasa, is under long-term contract at fixed contracted rate subject to bunker price adjustments and will not be affected by open market charter rate volatility. However, the results of the coming quarter will be affected by dry docking of the vessel for scheduled maintenance.
Only 1 vessel, Alam Kuasa. And take note that for the coming quarter, it has been schedule for dry docking, so revenue will drop due to the dry docking.
thanks for the comment. i did mention is a short term thing to capitalise the on-going conflict in the middle east that is sending frieght rate soaring.
Note: Higher Risk: With higher potential returns come higher risks. Maybulk’s stock is more volatile, meaning its price can swing more dramatically. This is not a “set it and forget it” kind of stock — it requires active monitoring.
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 2909 views | 2 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
DividendGuy67
1,078 posts
Posted by DividendGuy67 > 2023-12-29 01:23 | Report Abuse
Pity. This company is no longer the same company as it was 10-18 years ago.
Last annual report showed it only has 3 vessels left. Customer concentration risks are high.
Market cap is only RM305 million - a small company, no longer a shade of what it was 10-18 years ago.
Last Balance sheet showed 19+ sen cash. NTA 52 sen. Trading at 30.5 sen, so, undervalued by P/NTA basis and interesting.
However, business appears fairly valued (?). My estimate of 1 year EPS is around 1.2 sen. Excluding cash, the business is available for sale at 30.5 sen - 19 sen = 11.5 sen i.e. P/E of < 10, which is very fair for the future earnings from the 3 vessels.
Total cash is around 190 million + meaning they can't scale / grow their business in the future - if they use the entire 190 million to buy 2-3 vessels, that cash is gone.
If they pay out the 190 million + cash as dividends, market is going to drop down ex-div. We already seen that market is pricing fairly - on the last ex-div date, price fell 1.5 sen, exactly equal to the dividend paid out. At this juncture, this is now a penny stock with little upside / downside prospect.
It's not clear to me what happened to MAYBULK. I haven't monitored for over a decade and suddenly noticed this business is nothing like the business that it was 10-18 years ago. It looks to me this company is now ceasing / substantially reducing market's interest.
If you are a Book Value investor and are very patient, perhaps accumulating at low prices and hoping for a price spike to sell out may work out, but this can test even the most patient investors. Keep such plays a small % of one's capital.
For me, my rule is that the dividends must be funded by a % of earnings. If EPS is 1.2 sen and DPS is 1 sen, that's 3.3% of 30 sen price which is similar to FD rates and doesn't beat EPF, so, I'll pass. Sure, I'll grant that MAYBULK might use some of its cash to enhance the DPS to be larger than 1 sen, however, it will reduce its cash and limits its future ability to grow its fleets i.e. the more cash it distributes as dividends, the less chance it can grow its business in the future.
Just documenting my thoughts here for my own future reference to remind me to pass this trade.