Do you remember the times when you are still at your old school days ? If you can't imagine that, probably I can give you some reminisce on how it possibly look at.
When we are at school, we are always being graded by marks we obtain from our exam and school work. Talking about position in school, does it matter to you? For some...Yea, very much concerned, because it will be either receiving cheers or jeers from their peers. But for me? Haa... I don't really know if I had once seriously concerned about it at all. But. if you are reading this, you are now reading an article from a student that is many times bottom 3 in class position. Worst even, bottom 1 in Mandarin for 6 years (Goodness, I didn't know how I got through all this hell).
However, that doesn't deter me to be who I am today. I successfully graduated from my high school. Then I went into University, and graduated with a Dean List in my belt as well.
That is my story - From a rag to a piece of polished linen. Bad apple doesn't always stay bad, because it's seed can grow into a whole new tree to bear good apples again.
Now, I want to relate my story to a company which many would think is a goner. Bad company now, but will it continue to be bad in the future ? That is a question mark for me and you.
So, this interesting company is called - Shin Yang Shipping Corp Berhad (Syscorp - 5173).
However, investor should note that the worst could had gone, and the industry is currently seeing a recovery again.
As you can see in this charter rate by Harper Peterson & Co, the container shipping rates for ship below 3000 TEU is recovering towards a 2 year high now. The rising demand in container shipping is one of the signs that the global economy is strengthening, which is reflecting the Dow Jones Index which had hit above 26,000.
For the case of Malaysia, there used to be 3 listed company involved in container shipping. While Hubline had quit this business back in 2015, the remaining listed company will be Harbour and Syscorp.
As you can see, I had highlighted on Harbour when it is still sitting on it's lowly 70 cents region. Now As Harbour already appreciated more than 10% from it's bottom, it is now consolidating. But for the case of Syscorp, you must note that Syscorp is now still sitting at the bottom most of the chart, and in fact, the lowest point for the past 5 years. Despite the improving chartering rates in container shipping, Syscorp had not moved much yet.
For a starter, Syscorp is not involved in container shipping alone, it is also involved in dry bulk shipment (commodity shipment). According to Investing.com, Baltic Dry Index had also recovered from the recent low in 2016 that had went below 500.
Yes, I would agree with you that the better pick in this industry would definitely be Harbour. But given that the industry is currently moving on to a recovery, I would want to bring Syscorp to your attention as Syscorp is currently still sitting at it's lowest point despite the overall recovery in the industry rates. Fundamentally, Syscorp still have a fleet of 277 ships now, and NTA of RM 0.96. The current price of RM 0.25 is 73% discount on the NTA.
For this case of Syscorp, could it be just like my case? Will a bad student always be a bad student ? Or a bad student will one day turn good in the future? Now, at the lowest point of the chart and overall improving rates, is Syscorp worth your bet that this company will put up a better performance in 2018 ?
Now that is for you to decide. Cheers.
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