Friday, July 23, 2010

Pacific Shipping Trust -dbsv


Pacific Shipping Trust
DPU stable; first look at future growth
BUY @ US$0.295
Price Target : US$ 0.37

At a Glance
• PST’s 2Q10 results and distribution of 0.793UScts per unit in line with our expectations
• Existing cash flows look stable, management refocuses on growth plans with diversification into dry bulk sector
• Trading at about 11% FY10 yield, maintain our BUY call at TP of US$0.37 (9% target yield)

Comment on Results
DPU of 0.793UScts was declared for the quarter, which is similar to the 1Q10 payout. 2Q10 revenue of US$15.1m was steady on a sequential basis, and net profit held steady at US$6.6m. After regular loan amortisation of US$4.3m, net cash generated for 2Q10 amounted to US$6.5m - of which approximately US$4.7m will be distributed to unitholders and the remaining US$1.8m retained for future working capital purposes. This implies a payout ratio of about 72%, in line with existing conservative payout policy.

Outlook & Recommendation
As announced earlier, PST plans to acquire two new capesize bulk carriers for a consideration of US$61.6m each, for delivery in September 2011. The vessels come with a 10 -year long-term charter with Jiangsu Shangang Group of China, China's largest private steel maker and we believe, a reputable counterparty. The 2 vessels represent about 28% of current book value and is PST's first diversification away from the container sector. While the initial 15% deposit can be paid from existing cash reserves, the remaining 85% will have to be financed by a combination of debt and equity. Given the Trust is only likely to obtain 60% Loan-to-Value financing at best, that leaves a shortfall of around US$25-30m, which we believe could require another round of equity infusion next year. Given that the new ships will be delivered in end-3Q of FY11, and financing will only be required around that point, we do not foresee any impact to FY10 DPU estimates. However, depending on the timing of equity issue and pricing, FY11 DPU may face some dilution. We are currently looking at about 5-7% DPU accretion in FY12, based on our assumptions. Maintain BUY and TP of US$0.37.

Pacific Shipping Trust -dmg

Pacific Shipping Trust (PST) maintains stable results and diversifies in Q210 (

The news: Gross revenue in Q2 FY2010 from the 12 vessels chartered on long-term basis remained stable at US$15.1 million, recording a profit after tax of US$6.6 million. This was consistent compared to the corresponding period. For the six months of 2010, gross revenue was US$30.3 million and profit after tax totalled US$13.3 million. Going forward, PST’s contracted revenue in late 2011 would be higher as the 10-year time charter to Shagang for the two 180,000 DWT Capesize Bulk Carriers becomes effective. DPU of 0.793 US cents in 2Q10 was ~20% lower than in 2Q09 due to additional cash retention which started in the 3Q09, of which 30% of distributable income was retained as compared to 10% previously. This policy in preserving cash has enabled PST to acquire two new 180k DWT Capesize Bulk Carriers as announced on June 28, 2010.

Our thoughts: It appears that PST is planning to expand its fleet size aggressively as it continues its policy of cash retention this quarter. We see this as a sign of PST’s optimism in the shipping sector, particularly the bulk carrier segment, which is buoyant due to China’s demand for overseas commodities such as coal and iron ore. Meanwhile, the idle capacity of PST’s fleet has dropped to 2% of its total global fleet, the lowest since Nov 08 – another sign of recovery. We do not have rating on this counter.

Tuesday, July 20, 2010

short-term range from 2885 to 3000 -dbsv

Spice I2I (S$0.17) – SELL (cimb)

• The stock have confirmed its head & shoulders pattern with a neckline support breakdown at S$0.195 in late June (see 14th June issue). Prices appear to be rebounding a tad but we think this rebound is unlikely to be sustained.
• We expect prices to resume its downtrend towards S$0.125-0.13 next once this rebound ends. Minor support at S$0.165 and S$0.14.
• Its MACD and RSI are still on the rise, suggesting that prices could still head higher. Upside is likely capped by its moving averages, around the S$0.18- 0.195 levels as well as its neckline support turned resistance at S$0.195.
Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock