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Power stock heading to $4
Market watchers see further gains ahead. The closing price of 2,040 won valued the entire firm at 4.2 trillion won -- 10x its estimated 2007 net profit of 400 billion won.
"Because the PE ratio stands at around 10x even after today's strong gains, I think the stock has further upward momentum, up to about the 2,600-won level," said HJ Rhee, a fund manager at Hanwha Investment Trust Management.
"STX's earnings will be significantly higher in the 2nd half, with the Baltic Dry Freight Index hitting new peaks and expected to be on the boil the rest of the year," said Rhee.
STX Pan Ocean,
"Basically in Korea, there are buyers but no sellers. If they want to buy in, they either queue there or buy here," said a dealer with a local stockbroker.
By 0128 GMT, STX Pan Ocean was trading at a high of 2,040 won, up 18.6% from the issue price of 1,720 won fetched in the firm's share offer.
China's rapacious demand for iron ore, metals and other resources to fuel galloping economic growth has boosted international freight rates for bulk carriers, lifting earnings at dry bulk shipping companies such as STX.
"The Baltic Dry Freight Index is scaling new peaks these days which is absolutely positive for STX's earnings outlook," said Chung Kyun-sik, chief investment office at Eastar Investment Advisors.
"STX was one of the very few IPOs in Seoul that is big enough to grab investor attention and at the same time present strong growth prospects."
STX will use the proceeds from the Seoul listing to help finance its purchase of 16 vessels in '07, which it estimated would cost about US$800 million.
China COSCO Holdings forecast global demand for dry-bulk shipping to rise 7% in '08, outstripping supply growth of 4-5%.
Hi Raymondho, I Agree. Last check at Korea Xchange price still steady at 2040. With a uptrend Gap today to start at 3.12, i think $3.50- 4.00 is in sight.
Thank you, Dinola
I think it still has few days to go up.
How can we check its trading price in Korea Exchange?
oh listing in korea tomo?? haha sounds like gd news. all it needs is to close above 2.95 tomo for a new record high. Got some last min seller today. Bulls onboard stx!
It reached the resistance 3.04 but no strenght to breakthrough and finally dropped back to 2.95. Tomorrow will it breakout ? the chart looks very promising.
In breached $3.00 a short while ago in anticipation of the listing tomorrow in South Korea.
It's really hard to believe, the IPO at Seoul got 10 x subscription. this afternoon, it drops to 2.61, though it should be the support as 2.61 was the high point from which it jumped to 2.68, it had been wondering at 2.61 for few days. Just jump in, and immediate further drops to 2.57
Is any senior here has the storey or helps analyse? As ghlau935 posted the info which was quite encourgaing. Thanks
Looks like buyers are coming back.
the price seems low for a buy now......any comments?
DJ MARKET TALK: CLSA Ups STX Target To S$3.50; Keeps At Buy
0521 GMT [Dow Jones] STOCK CALL: CLSA ups STX Pan Ocean (V33.SG) target price to S$3.50 from S$3.00, based on P/E of 9X FY08 earnings, after raising FY08 net profit forecast to reflect favorable business conditions, as Baltic Dry Index "breaking all-time records and showing no signs of easing." Tips earnings of US$546.4 million for FY08, US$421.6 million for FY07. Dry bulk carrier earned US$129 million in FY06. CLSA keeps Buy call. Stock off 5.7% at S$2.64 midday. (FKH)
After the announcement that it IPO in Korea Exchange, even having a 10 times subscription yet today does not perform to investors' expectation. Why? Is that the price expectation in listing in Seoul had actually reflected in the last Friday's closing 2.84 ?
Will it moves upward or stay sideway for time being? Anyon who has the storey? mind to share ? thanks !
STX Pan Ocean is raising US$630 million in S. Korea's biggest IPO this year after pricing its offer above an indicated range, sources said on Tue.
S. Korea's top dry bulk shipping firm issued 343 million new shares - 20% of its enlarged stock capital - at 1,720 won apiece, raising a total of 590 billion won, sources familiar with the deal told Reuters.
The company had said in June it aimed to raise up to 396 billion won in the Seoul IPO, but sources said later it was raising the pricing range to reflect a gain in its share price in the past 3 months. STX Pan Ocean will list the shares on Seoul's main KOSPI board on Sep 21.
Samsung Securities and Goldman Sachs are the joint lead managers for the deal.
STX's Seoul listing, aimed at bankrolling purchases of new ships amid buoyant freight rates, marks the first time a S. Korean firm has gone public abroad first and then later listed shares at home
STX's offering trumped Samsung Card Co's US$620 million IPO in Jun as the country's top IPO in '07.
STX Pan Ocean rose, tracking a strong rally on the Baltic Exchange's Dry freight index, said a local dealer. The Baltic Dry freight index, which gauges the strength of seaborne dry commodities trade, set a record for a 3rd consecutive week on Mon on strong raw materials demand, buoyant economic growth and port congestion at key export centres.
STX Pan Ocean said on Tuesday that it has won contracts to build 6 ships worth $360 million.
STX Pan Ocean jumped to a record high as investors bet that the firm's revenues would get a boost from strong freight rates.
"Freight rates are holding up quite well and people are rotating between the shipping stocks," a trader at a local brokerage said.
Deutsche Bank analyst Joe Liew said in a note to clients last week that STX's EPS are expected to grow 148% in '07 on higher bulk rates and growth in non-bulk business.
Traders said some investors were also buying shares in STX ahead of its planned listing in South Korea on hopes that they can profit from any pricing differentials.
It said first-quarter net profit more than doubled thanks to higher freight rates and strong freight volumes, and predicted a better year in 2007.
It also said it would seek a secondary listing on the Korea Stock Exchange with a rights issue of up to 20% of the issued shares.
STX Pan Ocean, which derives most of its profit from shipping bulk cargo such as coal, grains and ore, reported first-quarter net profit of US$60 million, compared with US$26 million in the same period a year ago. Quarterly sales jumped 56%to $1 billion.
The Baltic Dry Index (BDI), which tracks bulk shipping rates, has risen from around the 4,000 level at the beginning of the year to 5,500 points in April, the firm said, resulting in higher freight rates and volumes.
"We believe this will kick off a better year for us as we harness on the improvement of the Baltic Dry Index (BDI), with sound strategies in place to pursue sustainable growth," said Jong Chul Lee, president and CEO of STX Pan Ocean.