Shipping stocks look hot as freight sector booms
04-OCT-2008 Intellasia | Thanhniennews
Oct 4, 2008 - 7:00:00 AM
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Despite Vietnam's economic slowdown, shipping stocks are considered rising stars with huge earning potential, analysts said.
Viet Dragon Securities analyst Phung Huu Hanh said the shipping sector had boomed in the first half of this year, with Vietnamese vessels carrying 141.35 million tonnes of cargo, a whopping year-on-year surge of 216% and more than last year's full-year shipments.
Maritime transport is a key part of Vietnam's logistics sector. About 80% of the country's imports and exports are delivered by sea.
Vinashin Petroleum Investment and Transport Joint Stock Co (VSP), known as Shinpetrol, last month announced its first half revenue rose 89% to 691 billion dong (US$42 million) and after-tax profit soared 729% to 190 billion dong (US$11.5 million).
The company, which floated on the Hanoi Securities Trading Centre in 2006, attributed its enormous earnings gain to three new dry goods freighters, lower depreciation costs and the higher fees it was able to charge for leasing its ships.
Investors have been buying the stock heavily since Shinpetrol's first-half results were announced. The results pushed its earning per share (EPS) to 14,000 dong. Since the end of June, Shinpetrol's share price has climbed 0.83% from 34,900 dong to 157,800 dong Wednesday.
"Shinpetrol doesn't disclose the charge for each of their ships," said Nguyen Thi Thu Ha, an analyst at HCM City Securities Corp "But the total load capacity of all of its ships rose from 128,300 dwts (dead-weight tonnes) to 226,300 dwts and revenue from ship rentals rose from 118 billion dong (US$7 million) to 518 billion dong (US$31 million) in the first two quarters of the year. This suggests the firm raised its renting charges by 150%."
Ha also noticed the firm was able to earn quick profits by letting its freighters out on short-term leases.
Bao Viet Securities Corp expected Shinoperol's EPS would become more attractive this year, rising to 25,600 dong per share. Both HCM City Securities and Bao Viet
Securities noted the firm needed to upgrade its ageing fleet, which had an average age of 23.3 years per vessel. The average age of international freighters is 15 years.
Investors are also casting appreciative eyes over other transport firms, including Vinaship (VNA), petroleum transport firms Vipco (VIP), PV Trans (PVT) and Vitaco (VTO).
Since June 30, shares of PV Trans have gained 51% and Vitaco have added 11.5%. The major stock market in HCM City moved up 14% and the smaller exchange in Hanoi advanced 33% over the same period.
Vipco possesses freighters with a total load capability of 112,459 dwtand the company has captured more than 60% of the market in the northern provinces of Hai Phong and Quang Ninh.
Vitaco's fleet, with a total load capacity of 156,258 dwt, is one of the country's largest.
The shipping firm is one of state-owned Vietnam Petroleum Corp.'s main petroleum transporters, carrying 25% of the nation's fuel imports and holding a 40% share of the domestic fuel transport market.
According to international maritime brokerages, shipping firms expect shipping charges will increase at the end of the year, the time when demand for importing and exporting goods is also high.
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