Courage Marine   

Courage Marine--- A courageous play

Wah now the Baltic Dry Index is like 10000++ points.. doesn't that mean Courage Marine should rally soon...

 

 

 

Courage marine has rallied today woo hoo!!!!

 

also cannot follow blindly mah..

i heard my friends bought at 20+ cts. now 40+ cts. In your opinion still can buy? For one i know that they have lotsa shares in the market, about a billion. Is that right? Thanks.

 

just follow. thks.

 

conga its ripe waiting to harvest, just might be today.

 

Sign of over sold and now the 2nd cup is forming, take a look.

Momentum is picking up, MFI is increasing and last min buy up is very stong.

Just need 1 more big gap to balance it.

17:05:03	0.440	367,000	X
16:58:31	0.440	20,000	A
16:58:27	0.435	1,000	B
16:58:25	0.435	15,000	B
16:57:47	0.440	10,000	A
16:57:31	0.440	25,000	A
16:55:34	0.440	2,000	A
16:55:27	0.440	15,000	A
16:54:56	0.440	20,000	A
16:54:47	0.440	1,000	A
16:53:45	0.440	50,000	A
16:53:37	0.440	10,000	A
16:51:45	0.440	20,000	A
16:51:14	0.440	30,000	A
16:51:03	0.440	8,000	A

 

How long to wait huh? getting a bit impatient aledy.

 

definitely good buy...

 

Highlighted in Green was mentioned about Courage Marine

Published October 6, 2007- The Business Times
 
State of the shipping industry

By TEH HOOI LING
SENIOR CORRESPONDENT
 
RECENTLY I dropped in on Marine Money Asia Week, a conference
that looked at the latest finance and investment opportunities for the
shipping and oil service sectors.

I sat through several sessions, and for someone not too familiar with the
sector, they were useful in providing information to better understand the
dynamics of the industry. So I thought I'd share some of the insights
provided by conference speakers with BT readers this week.

Dry bulk sector
Merrill Lynch analyst Teddy Tsai presented a report on Asia-Pacific
shipping. He sees the dry-bulk sector peaking in the fourth quarter of
this year. Freight rates in the segment, measured by the Baltic Dry Index,
have surged more than 200 per cent from the start of 2006 until now.
Mr Tsai's model predicts the peak to be just above 7,500, easing
subsequently to about 6,000. However, as of last week the index had
broken above 9,000.

He reckons temporary factors that have caused the surge in the BDI -
such as port congestion and pent-up demand in China - will ease next
year. And a significant supply of dry-bulk carriers will enter the market
in 2009-2010.

Mr Tsai's advice: Take profit on selected stocks and focus on
growth-oriented plays.

Meanwhile, London-based research firm Simpson, Spence & Young (SSY)
noted that the total dry-bulk order book has surged to 160 million
deadweight tons (dwt), with the bulk of deliveries taking place in 2010 as
new shipyards come on stream.

The orders are concentrated on the Capesize sector - ships too large to
traverse the Suez or Panama canals (that is, larger than Panamax and
Suezmax vessels). To travel between oceans, they must go around the
Cape of Good Hope or Cape Horn.

On the demand side, the Chinese ore trade is expected to sustain firm
rates of growth in the Capesize sector. Based on expected demand and
the order books, SSY reckons the supply of dry-bulk carriers will exceed
demand by 2010. The number of dry-bulk vessels on order is equivalent to
40 per cent of the existing global fleet.

But SSY said there are three uncertainties: One, the rate of growth in Chinese
iron ore imports; two, the ability of greenfield shipyards to meet delivery dates;
and three, the number of very large crude carriers (VLCCs) being converted to
very large ore carriers (VLOCs).

Right now, dry-bulk companies are enjoying boom times. And the participants
in the dry-bulk panel discussion - Hong Kong-listed Pacific Basin Shipping,
Oslo-listed Jinhui Shipping, Bangkok-listed Precious Shipping Public Company
and Singapore-listed Courage Marine - all painted a picture of abundance.

Said Khalid Hashim, managing director of Precious Shipping: 'We are in a super
cycle. The dry bulk space is going to keep everyone in good spirits for the next
10 to 15 years.' But he admitted there will be corrections of one to two years in
between. Typically, the upcycle is five to seven years. The current pick-up
started in early 2003, making the cycle at the tail of the fifth year.

Klaus Nyborg, deputy chief executive of Pacific Basin, said the engine for the
dry-bulk market is China. Not like the tanker segment, where the engine is the US.

Added Thomas Ng, managing director of Jinhui: 'As long as China continues to
perform we will continue to do well.'

Mr Nyborg said the Handysize segment - dry-bulk vessels of 15,000-50,000 dwt -
is the most attractive. These vessels carry many different products and are not
dependent just on iron ore. The average age of the global fleet is 17.8 years and
a ship's expected useful life is 25 years. New orders are low relative to those for
other types of vessels. So going forward, supply will not increase too significantly.

According to Mr Nyborg, the current spot market net rate for Handysize is
US$37,500 a day versus a vessel's cost of US$9,370 a day.

Times are so good that if one owns a Panamax - a vessel with the maximum
dimensions that can pass through the locks of the Panama Canal - one can
pocket $20 million profit a year. And that's more than the profit made by a lot
of Singapore-listed companies, said Hsu Chih-Chien, chairman of Courage Marine.

Courage Marine operates 10 bulk carriers - five Handysize, two Handymax
(typically 35,000-60,000 dwt) and three Panamax with a total tonnage of about
455,463 dwt.

Mr Hsu is more conservative compared that his peers. He said the dry-bulk market
will be good for the next two or three years but there is a question mark beyond that.
As such, Courage intends to stick to its old and tested formula of buying second-hand
vessels to enjoy the current cycle.

'We won't dare to take the market beyond two to three years,' said Mr Hsu.
'For new-building, the vessels will only be delivered in three to four years' time.'

Even with second-hand vessels, he has reservations given the very high prices now,
unless a deal is exceptionally good. Second-hand vessels are currently more expensive
than orders for new-builds.

Shipping trusts

Another sector that is very bullish is shipping trusts. All three trusts listed on the
Singapore Exchange - First Ship Lease Trust (FSL), Pacific Shipping Trust and
Rickmers Maritime - are trading at a dividend yield in excess of 8 per cent.
In comparison, shipping trusts in the US are trading at yields of about 6 per cent.

Any yield compression in the trusts in Singapore will see significant price appreciation.
For example, FSL is trading at a yield of about 10 per cent. A compression of
yield to 7 per cent would mean a 50 per cent increase in its share price.

Ashok Pandit, Deutsche Bank's head of South & Southeast Asia Equity Capital
Markets, said the lack of appreciation of shipping trusts among investors here has
kept their prices depressed despite their strong growth.

It's the same in the US. Shipping trusts did not perform in the first six to 12 months
after their market debut. Investors waited for them to develop a track record before
bidding up the price. Similarly, shipping trusts in Singapore will need to demonstrate
their ability to acquire earnings-accretive vessels.

Of the three trusts in Singapore, Pacific Shipping and Rickmers are in the container
segment. The former operates 10 vessels and the latter six, with 12 to be delivered.

FSL is diversified. It has four container vessels, seven product and three chemical
tankers, and two dry-bulk carriers.

The panellists pointed out that unlike real estate investment trusts or Reits, where
the underlying assets can appreciate in value over time, ships are depreciating
assets. However, they can deliver sustained dividends. As the vessels are
chartered out for seven to 10 years, they are not affected by the shipping cycle.

DBS Vickers pointed out in a report that one of the short-term risks of shipping
trusts in Singapore is the weak US dollar. 'All shipping trusts generate US$-based
cashflows,' it said. 'In the case of Rickmers, which is S$ listed, the yield for FY08
can drop from 8.2 per cent to 7.8 per cent in the event that the US$ depreciates
5 per cent from current levels.'

The writer is a CFA charterholder. She can be reached at hooiling@sph.com.sg

 

hold n profit, coming soon...

 

no worries about this counter lah; it's steady but not reckless, expanding within its means. And still affordable but will definitely take off in due time.

 

Looks like losing courage to cheong despite solid fundamentals! 

 

Latest News update....

The Business Times
September 25, 2007, 8.51 pm (Singapore time)
 
Courage Marine bullish as shipping booms
SINGAPORE - Singapore-listed Courage Marine expects to post
record results for this year, thanks to a boom in shipping freight rates,
but the firm is cautious about expanding, its chairman told Reuters on
Tuesday.

The shipping firm's Taiwan-based chairman Hsu Chih-Chien
said net profit for the second half of 2007 should be better than the
US$20 million posted for the first half, and it plans to spend US$60 million
to add three new ships within a year to its fleet.

'Sixty per cent of our ships are based on spot rates, so we have
enjoyed this boom to the absolute fullest,' Mr Hsu told Reuters
in an interview on the sidelines of an industry conference in Singapore.

He said that China's infrastructure and construction boom would
sustain a rally in freight rates in the next few years, and drive
demand for the company's existing fleet of 10 bulk carriers, which
transport mainly iron ore, coal and cement.

The Baltic Dry Index - which charts rates for seaborne trade
of commodities like iron ore, cement, and grains - has hit regular
record highs in the past month and more than doubled this year,
lifted by China and India's roaring growth.

Courage Marine, which has a market cap of US$274 million,
reported a net profit of US$20.1 million for the first half to
June 2007, while full-year earnings for 2006 were US$27.8 million.

'We have no debt and several lines of credit that we have not used,
so there won't be a problem financing our fleet expansion,' Mr Hsu said.

The company competes with other operators of bulk carrier fleets
like Pacific Basin Shipping, Precious Shipping, and Jinhui Shipping
and Transportation.

Despite its plans to buy three ships, Mr Hsu said Courage Marine
prefers to be more cautious than other shipping firms that have
aggressively expanded their fleet this year.

'We have experienced the roller-coaster of the industry and how
bad it can get in a downturn, so we prefer to be rather conservative
in expansion,' he said.

He added that the company has a bigger risk appetite on the volatile
spot market - where ships are leased out on short terms of three
months or less, and thus subject to frequent rate changes.

'To us, the spot market is gambling with loose change.

'Whereas if we make a mistake with a ship acquisition,
we're gambling with big bills,' he said.

He said the risks of being exposed to the spot market
were mitigated by long-term relationships with some of
its major customers, such as state-linked companies like
China Coal Energy and Taiwan's Formosa Plastics.
-- REUTERS

 

Twin Dragon Fly Doji    T T

 

Hi rogue_trader,

your est (posted 8/jun/2006) was in-line actual performance, any view for this counter in the next 6 mth? thks

 

TP$0.48 from Phillip research dated 6Aug07, and TP $0.48 from DMG & Partners research dated 07Aug07 ( http://research.sgx.com/ - free sign on )

" Bullish outlook for dry freight services - Strong demand and booming economies around the region give a strong signal of vast potential that CMG could tap into.... and BDI level expected remain firm and on the rising ( Current Index level of approx 5300 is 90% higher than year ago) ..... PE of 9x and arrived at fair value of $0.48...The recent jittery market conditions offer opprtunity for accumulation on this counter."    

 

 

Technicals looking good on this counter!

Any views?

 

chiasb,

You may want to refer to the attached link which tracks the BDI (Baltic Dry Index) freight rate.

The BDI is an indicator of the health of bulk freight rates (for bulk carriers - the business of CM).

Please note, this does not apply to containers and tankers.

http://investmenttools.com/futures/bdi_baltic_dry_index.htm 

 

anyone can advise if now the trend is towards to shipping service line....

 

 

Courage Marine noted that ongoing demand for the transport of building raw materials, iron ore and coal would keep the BDI high. The BDI averaged 5,200 in H107 against 2,700 in H106.

The CEO also believes that there is no significant new supply of vessels in the immediate future to dampen the demand-supply imbalance. He added that he expects China's appetite for raw materials to continue to rise. He also noted that there was regional demand for construction building materials such as sand and gravel. Recently, it secured a 1-year contract of affreightment for 2 million tonnes of gravel. In H107, its breakeven operating cost of around US$7,000 a day was below the US$20,000 average.