Earnings Report /
Thailand

Precious Shipping PCL: Biggest core profit in 11 years! 2Q21 looks even better

  • Biggest core profit in more than a decade

  • PSL reported a 1Q21 net profit of Bt375m

  • Revenue rose by 18% YoY and 19% QoQ

Bualuang Securities
13 May 2021

The market has already recognized the impressive freight rate outlook and priced it in. However, we suggest letting profits run, given the positive sentiment toward the stock during this up-cycle in the dry bulk shipping market and speculative flows in anticipation of the possibility of PSL paying a dividend for the first time since 2015. As such, although the current market price is slightly above our target, we maintain our HOLD call.

Biggest core profit in more than a decade

PSL reported a 1Q21 net profit of Bt375m, a YoY turnaround and up strongly QoQ from anemic 4Q21 net earnings. The reported bottom-line beat our estimate by 13% (the firm marked heavier FX gains than assumed), but missed the consensus by 6%. Stripping out extra items, the core number would be Bt271m, a YoY turnaround and up 321% QoQ—the highest core profit since 4Q09. The core number missed our estimate by 18% (lower T/C rates for the Supramax and Ultramax classes than assumed) and the street by 51%.