It has been a while since I updated, mainly busy with personal commitments. Freightlinks released their first quarter results for WY2009 and I will talk more about it below.
I have yet to invest in Freightlinks. With all the happenings in the financial world I have spent time trying to comprehend what the news really mean and to gain a better understand of the whole system.
Coming to Freightlinks, since I wasn’t able to find a quarterly results for their last quarter (they summed it all up in a yearly one), I took their yearly results and divided them by 4 to get an estimation of their last quarter’s results from year.
Revenue for their 1Q09 was at $37,760,000 compared to the average of $34,857,000 in WY08. This equals to a gain of 8.32% in revenue. Net profit for 1Q09 is at $2,533,000 compared to average of $4,374,500 in WY08 which will work out to a drop in Net profit margin of 12.6% to 6.7%. While operating cost increased by 4.7%, it is an indication that their growth in revenue is not matching up to the increases in operating cost and also perhaps a sign that the effects of an economic trade slowdown is starting to show decreases in their freight forwarding income. It is necessary to keep track of their revenue in the result releases.
Freightlinks has a decrease in their cash and cash equivalent from $43,266,000 to $33,872,000 mainly to finance their acquisition of Citic Logistics which will provide them with a stake into the China Market. Secured liabilities have also increased from $92.5mil to almost a $100mil now, with $60mil payable in one year or less. Looking long term, their non-current debt to equity ratio is at 3.5 or about 28.6% which is leaning more to the positive side.
Also, maybe a piece of good news to investors, CEO Mr Eric Khua recently doubled his stake in Freightlinks from 0.12375 % To 0.23911 %.
Summary
EPS for this quarter is at 0.12 cents, P/E at 5.7. NAV is at 6.15cents calculated based on 2,103,287,102 shares. However with the exercising of their warrants in march next year, supposedly all warrants get exercised, the total number of shares will rise to 2,870,354,676 and taking into consideration their assets stays around the same figure, NAV will drop to 4.50cents. I am positive on Freightlink’s establishment in the local and overseas market and with this in mind, I will look to buy in at around 3.5/4cents which is a 20% discount to current market value of 5cents and about 10% discount to NAV to give myself a margin of safety.
Showing posts with label Freightlinks. Show all posts
Showing posts with label Freightlinks. Show all posts
Saturday, September 27, 2008
Saturday, August 30, 2008
Wednesday, August 27, 2008
Freightlinks
Freightlinks is a 3PL logistics company dealing mainly in freight-forwarding. Basically a third-party logistics (3PL) provider is a firm that provides outsourced logistics services to companies for part, or sometimes all of their supply chain management function.
As such, it is important for a 3PL firm to establish a good international network as well as have forwarding agents at countries of growing economies (i.e. China/India) and they have just that.
Looking at their financial report for FY2008, their net profit has increased almost 40% from S$12.5 million to S$17.5 million. Giving rise to a net profit margin increase of about 2.6% from 2007 – 2008. Increase in net profit margin is important as it shows how efficient the group is. EPS for FY2008 is at 0.88 cents.
The group has about S$43 million in cash which is a moderately humble amount. However, their total of financial liabilities of secured bank borrowings adds up to a total of almost S$92.5 million with S$58 million due payable in the current year. Their borrowings have mostly been used to finance their acquisitions and constructions of warehouses justified in their increase in assets and property over the years.
With secured liabilities at S$92.5 million, their net debt to equity ratio stands at 0.67 showing that it is not necessarily a very strong balance sheet.
However the outlook for them looks positive. Completion of their warehouses earlier last month will help to bring in more revenue. They are also well invested in fast growing markets like China where demand for logistics services will grow rapidly as well as in the Chemical logistics sector to cope with Jurong Island’s increasing need for dangerous goods warehouses. Their warehousing space enjoy about 90% occupancy and will soon increase to 1.5 million sq ft. Most of their assets have not been revalued after being written down years ago so we are technically looking at a virtual goldmine. Also, their net asset value (NAV) increased by 1.04 cents to 6.02 cents in FY2008 which is just over its current trading price of 6.00 cents. With such an attractive NAV coupled with a PE ratio of 7.4 and a cash dividend of 0.25 cents a share, I believe we have a winner here.
Conclusion
Freightlinks to me is well poised to enjoy a logistics boom in countries where it is well invested in such as China. Also with the YOG 2010 being held locally, I believe it will be beneficial to our local logistics community.
However, with current economic sentiments so discouraging, it is up to individual’s risk appetite and time horizon to decide if they want to invest in Freightlinks.
For me, their outlook is bright and I will be paying close attention to their debt and profit margin in the next financial report. But for now, their NAV of 6.02 cents, Undervalued warehousing space, low P/E ratio plus an attractive dividend is too good to pass, will invest when the next paycheck comes in!
As such, it is important for a 3PL firm to establish a good international network as well as have forwarding agents at countries of growing economies (i.e. China/India) and they have just that.
Looking at their financial report for FY2008, their net profit has increased almost 40% from S$12.5 million to S$17.5 million. Giving rise to a net profit margin increase of about 2.6% from 2007 – 2008. Increase in net profit margin is important as it shows how efficient the group is. EPS for FY2008 is at 0.88 cents.
The group has about S$43 million in cash which is a moderately humble amount. However, their total of financial liabilities of secured bank borrowings adds up to a total of almost S$92.5 million with S$58 million due payable in the current year. Their borrowings have mostly been used to finance their acquisitions and constructions of warehouses justified in their increase in assets and property over the years.
With secured liabilities at S$92.5 million, their net debt to equity ratio stands at 0.67 showing that it is not necessarily a very strong balance sheet.
However the outlook for them looks positive. Completion of their warehouses earlier last month will help to bring in more revenue. They are also well invested in fast growing markets like China where demand for logistics services will grow rapidly as well as in the Chemical logistics sector to cope with Jurong Island’s increasing need for dangerous goods warehouses. Their warehousing space enjoy about 90% occupancy and will soon increase to 1.5 million sq ft. Most of their assets have not been revalued after being written down years ago so we are technically looking at a virtual goldmine. Also, their net asset value (NAV) increased by 1.04 cents to 6.02 cents in FY2008 which is just over its current trading price of 6.00 cents. With such an attractive NAV coupled with a PE ratio of 7.4 and a cash dividend of 0.25 cents a share, I believe we have a winner here.
Conclusion
Freightlinks to me is well poised to enjoy a logistics boom in countries where it is well invested in such as China. Also with the YOG 2010 being held locally, I believe it will be beneficial to our local logistics community.
However, with current economic sentiments so discouraging, it is up to individual’s risk appetite and time horizon to decide if they want to invest in Freightlinks.
For me, their outlook is bright and I will be paying close attention to their debt and profit margin in the next financial report. But for now, their NAV of 6.02 cents, Undervalued warehousing space, low P/E ratio plus an attractive dividend is too good to pass, will invest when the next paycheck comes in!
Sunday, August 24, 2008
Freightlinks
I've been paying attention to the logistics sector and recently got interested in this counter. Although it may be a penny stock, their financials look very appealing. I always feel that logistics is a very under-rated job so I may be bias.
Will be posting a more detailed insight into this counter and its peers on the market.
Will be posting a more detailed insight into this counter and its peers on the market.
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