Maybulk make profit in 2018 but if was a gain from selling off an associate company. The company was loss making and has with a necessary impairment done, they have a clean plate to start off for 2019. So without the lossmaking company, newer ships and great BDI rate, i guess the prospect is good. So long BDI stays above 2200, maybulk will soon turn into maybank.....LOL....carry plenty of cash.
I did a simple calculation, it BDI stays above 2200, it should earn 2 to 2.5c per Q. Not sure is shipping seasonal where it is affected by monsoon. But using golden rule can really earn 8 to 10c per yr leh. PE 8 = 0.80c loh. PE10 = RM1??? Also, this is company has strong management. Robert kuok company leh....but of course he retired la. I think they have managed the company well by keeping the company afloat despite unfavourable rate. So now the wind is on their side and blowing in their direction. Apa lagi tunggu. I jump onboard for the free ride loh......
Having weathered a weak Q1 in 2019, the Baltic Dry Index (BDI) regained some momentum and the freight market witnessed improvements across all segments in Q2.
The increase in seasonal soya bean shipments from Brazil to China which started since March 2019 and the resumption of Vale’s iron ore shipments in June 2019 helped to drive freight rates higher particularly for Capesize and Panamax vessels.
The world operating fleet is expected to reduce in 2H of 2019 as more vessels are taken off for scrubber retrofitting in preparation for new emission regulations which will come into force from 1st January 2020.
The added tonne miles from soya bean and iron ore shipments together with the reduced world operating fleet should help improve freight rates in 2H 2019.
Maybulk is an example of a company in the hard-asset based subsector.
Companies in the hard-asset-based subsector depend on big investments in fixed assets to grow their businesses.
In general, these companies aren't as attractive as technology-based businesses, but investors can still find some wide-moat stocks and good investments in this area.
The majority of hard-asset-based companies fall into the narrow- or no-moat buckets. With few, if any, competitive advantages for many of these companies, investors should look for a pretty STEEP DISCOUNT TO A FAIR VALUE ESTIMATE before buying its shares.
Growth for hard-asset-based businesses inevitably requires large incremental outlays for fixed assets.
Because the incremental fixed investment occurs before asset deployment, companies in this sector generally finance their growth with external funding. Debt can be used to finance almost all of the asset's cost, so lenders generally require the asset to provide collateral against the loan.
With this model, high leverage is not necessarily a bad thing, provided that the company can make enough money deploying the asset to cover the cost of debt financing and earn a reasonable return for shareholders.
Other characteristics of hard-asset-based businesses make this segment worth watching. The idea of limited or shrinking assets, for example, can go a long way to provide stability in the competitive landscape for these companies.
Hallmark of Success for Hard-Asset-Based Businesses
1. Cost leadership: Because hard-asset-based companies have large fixed costs, those that deliver their products most efficiently have a strong advantage and can achieve superior financial performance. To get an idea about how efficiently a company operates, look at its fixed assets turnover, operating margins, and ROIC - and compare its numbers to industry peers.
2. Unique assets: When limited assets are required to fulfill the delivery of a particular service, ownership of those assets is key.
3. Prudent financing: Remember, having a load of debt is not itself a bad thing. Having a load of debt that cannot be easily financed by the cash flow of the business is a recipe for disaster. When analyzing companies with high debt, always be sure that the debt can be serviced from free cash flow, even under a downside scenario.
Maybulk : Next QR will be end of Nov which will cover Jul, Aug & Sept which is also the biggest jump in BDI. I think average is above 2000. Last QR which is Apr, May and June, the BDI is on average 1000 only. So now it is x2?
This means Maybulk profit will be double in coming Nov. That's why Maybulk today uptrend and price shot up.
THE tallest ferris wheel in Spore about 500 feet at its highest At peak you can see whole of Spore, Johor and parts of Indonesia It takes about 30 minutes to make one cycle
2. Then we have yearly cycle
Moon cake, bah Chang (Chinese dumpling), santa Claus for Christmas, durian season, salmon run season, winter ski resort for 2 or 3 months
All these are cyclical and seasonal
3. Then in Malaysia we have cyclical steel stocks that depend on heavy high infrar projects like highways, schools, mrt, lrt, ecrl, pan Borneo, high speed rail. When infrar jobs in earnest then demand for steel goes up. If delayed or postponed steel goes down
So a cyclical depends on these
1. The times and the seasons Bad times like North East monsoon will affect fishermen in Trengganu as sea very rough and dangerous. And monsoon months caused ogse business to slacken. That was why Uzma was down. Now monsoon over so Uzma performs again
2. Govt If Govt starts infrar works for economic stimulation then demand for cyclical steel and cement will increase
In the case of soya bean export from Brazil to China it was caused by US trade war with China
In the case of Iron ore from Vale it was court order banning Iron ore mining due to dam collapse. Now that export has resumed demand for dry bulk ships increased
Govt wants clean sulphur ship... So imo2020 put some old bulk ships out of action As there are less ships so less competition
AND after installation of scrubbers prices also rise in tandem
So cyclical can go up due to seasonal changes It can also go up by Cause and Effect
AND to anticipate changes Maybulk Bosses are able to see ahead and be proactive.
Retired old ships. Build newer, bigger ships.
So it has been very "lucky"?
AND luck is preparation meeting opportunity
Investing also depends on experience.
You must know ahead of time from reading up or from personal experience or observation
My Johor Sifu made lots and lots from bdi index rise and maybulk bull run in year 2008 when I made zero because I was a spectator then
In investing, there have always been hundreds of cases and thousands of cases of things that are ridiculously priced, phony stock promotions and the gullible being led into believing in things that just cannot come true. That has always gone on and will always go on.
It doesn't make any difference to your investing. Be aware.
Ooooo.....talk so much......meaning maybulk is good buy la......hopefully loh and not goodbye.....hehe.....
Minggoon, the ROE 107% cannot see 1 la......it is from selling off a business. Then they have 1 impairment because selling at loss,......
Now it is only see can BDI sustain above 2200 or not. If is just like last time when brent at $20, Oil counter lose money. $40 break even. $60...make money......$80.......go crazy.....hehe...
So now BDI.....$500, lose money. $1500, break even. $2000, make money. $3000???--i go crazy.......LOL
Since July to Sept months are registering highest bdi index for the last 9 years
Nov 2019 good or excellent results already locked in
If bdi can sustain above 2000 to 2200 range for the remaining months of 2019 then Feb 2020 results should also be excellent
If bdi index should break out above 2500 points to 3000 points like those years of 2004 to 2008 then market will go crazy..... And into unchartered territories
2393 is the previous day 1 la......now 2331. By 12 noon today u will see the updated rate. if not mistaken, BDI rate on update once a day. They are not as active as oil price.
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....
speakup
27,074 posts
Posted by speakup > 2019-09-12 09:24 | Report Abuse
better fast fast grab 74.5 before too late.......
LAST CHANCE!!!! jangan degil!