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Some of the best kind of information we can collect regarding a company's prospects is from revelations by other companies in the same industry. I would like to share something I came across in NextInsight on Jaya Holdings which was published on 12 February 2013.
It was revealed that Jaya Holdings, from chartering its vessels to the O&G industry, "reaped US$7.8 million net profit compared to the paltry US$0.4 m in the same quarter a year ago."
"The jump in chartering net profit came from Jaya's charter fleet enjoying an 80% utilisation rate in 2Q2013 versus 62% a year earlier.
"The higher demand came with higher averge daily charter rates: US$12,685 versus US$9,222.
"The seas, however, have turned choppy. Jaya is expecting its fleet utilisation rate to sink somewhat in the current 3Q2012.
"A key reason is the implementation of (long-deferred) cabotage rules by Indonesia effective 1 Jan this year, which has led to the cancellation of charters for 3 Jaya vessels in Indonesian waters. That's 3 out of 28 vessels in Jaya's fleet."
CEO Venkatraman Sheshashayee revealed that chartering vessels in Indonesia was providing a decent rate of return on investment. However, now, "the rates there are probably climbing upward because now there is a serious shortage of vessels there."
Jaya's revelations bolster my strong believe that Marco Polo Marine's economic moat has strengthened and that it is positioned to benefit from higher charter rates in Indonesia this year.
The writing is on the wall and early investors in Marco Polo Marine will benefit.
To read the full article, visit NextInsight:
JAYA HOLDINGS: Strong Chartering Profit in 2Q
Related post:
Marco Polo Marine: Indonesian Cabotage Law.
Bloggy Award
13 comments:
Since this law only kicks in in January, it's effect will only be felt in first Q reporting. Still have time to accumulate. Where is Monday? Cant wait för it to come so can go on a shopping spree. LoL
Hi seefei,
Indeed, this is an interesting discovery, isn't it? :)
Even at 42c, I believe the shares to be undervalued. Of course, Mr. Market doesn't care about what I think. ;p
Hi ,
I think we need to see some Volumn to get it charging up
Hi Tom,
Share price has moved up quite a bit from the time I got in. It has been moving sideways for a few sessions on low volume.
Technically, sideway movements are more bullish than bearish in an uptrend.
Will just have to wait and see. :)
Have been Qing at 41cent these few days. But never get. Haha
Hi yeh,
41c and 42c are just 1c apart. So, I just bought more at 42c. ;p
I got some at 0.42 this today, the support at 0, 42 is strong!
Hi Jimmy,
In such instances, I would suspect that share price is doing a correction using time. This means moving sideways over a period of time while waiting for the MAs to catch up.
I notice that the Bollinger Bands are also beginning to narrow. The reducing volatility has been likened to the calm before a storm. An sharp movement in share price is probably on the horizon.
Hi AK71,
I'm not As knowledgeable As you.
Im still learning from your blog and researching on the stocks which you blog about before making the purchase.
Dun understand about MAs and boiling point , but I been taking note of this macro polo and it has been at 0.42 for some time , didn't touch 0.415 at all.
To me, seems like someone is slowly accumulating and not wishing for other to notice..
Just my thoughts
Hi Jimmy,
We are all knowledgeable in our own ways and we should all share freely. After all, none of us have the resources to corner the market, do we? ;p
MAs = Moving Averages.
Not boiling point, Bollinger Bands. ;)
These are used in Technical Analysis (TA). If you would like to learn about TA, I recommended a few books here:
Recommended books for FA and TA.
MAs help me determine supports and resistance in an uptrend or downtrend.
Bollinger Bands, in this case, hint that price is setting up for a big move because the bands are narrowing or squeezing.
Your observation could indeed be correct and I think another reader suggested something along the same line. :)
Thanks AK71 for always replying :)
One of the book from betterbetterworldbooks had just arrived, I'm planning to get the book on value investing once I'm done reading .
Awaiting more of your new posts, cos im always checking your blog whenever I'm free LOL
Hi Jimmy,
You are welcome. I do my best to reply in a timely manner.
Good news on the book. Hope you enjoy it. :)
Indonesia’s recently-enforced cabotage law has forced out 20% of the modern AHTS supply.
The cabotage law was enforced for AHTS vessels after 31 Dec 2012. This has caused foreign operators to see their contracts cancelled and the vessels sent out of
Indonesian waters.
Our industry sources inform us that there are only about 30 modern
AHTS vessels between 5000bhp and 8000bhp size in the whole country. Of these 30, we are aware of at least 6 which have been forced out of the country.
MPM is the prime beneficiary of the cabotage law. With the supply suddenly shrunk by 20%, charter rates have spiked about 20% higher than regional rates.
MPM’s four AHTS vessels in Indonesia are now reaping the benefits of high charter rates, high margins, and high utilisation rates.
Also, MPM’s AHTS vessels have sustained bollard pulls averaging 15% above the norm. This ensures that their vessels are always
preferred, ahead of others when competing for charters.
Their shipyard also recently outfitted a DP-3 vessel, which is an impressive achievement for a small shipyard. We count fewer than a dozen shipyards in Singapore which can outfit DP-3 vessels.
OSK Research, 21 Feb 13.
What are DP-3 Vessels? I decided to find out:
Dynamic positioning (DP) is a computer-controlled system to automatically maintain a vessel's position.
Dynamic positioning is used by much of the offshore oil industry.
1. Class 1 has no redundancy.
Loss of position may occur in the event of a single fault.
2. Class 2 has redundancy so that no single fault in an active system will cause the system to fail.
3. Class 3 which also has to withstand fire or flood in any one compartment without the system failing.
Source: Wikipedia.
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