Pacific Basin Shipping Intrinsic Value Calculation – Pacific Basin Shipping Sees 10% Revenue Increase in 2022, EPS Lags Behind Expectations.

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Pacific Basin Shipping ($SEHK:02343)’s Full Year 2022 Results have been released, showing that while revenue exceeded expectations, EPS lagged behind. Revenue was US$3.28b, a 10% increase from FY 2021, while Earnings Per Share was US$0.75, a 6% decrease from FY 2021. The revenue increase was driven by a strong performance in its core dry bulk shipping business, along with a surge in demand for the company’s tanker, container and offshore vessels. Pacific Basin also saw a rise in charter rates in the second half of the year.

Despite the growth in revenue, the company’s earnings per share fell due to rising costs, including higher fuel prices, labor costs and other operating costs. Pacific Basin has stated that it plans to focus on improving operational efficiencies and developing new smart solutions for better vessel performance and energy efficiency going forward. This, along with a favorable outlook for the shipping industry, should help reduce costs and improve capacity utilization and margins.

Share Price

Pacific Basin Shipping has recently seen a 10% increase in revenue for 2022, yet their earnings per share have fallen short of expectations. This news has been met with mostly negative coverage, with the stock opening at HK$3.3 on Monday and closing at HK$3.1 – a 6.0% decrease from the previous closing price of HK$3.3. As of now, analysts are still trying to determine if this disparity between revenue and earnings per share is simply a result of a hiccup in the market, or if it is a sign of something larger. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Pacific Basin Shipping. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Pacific Basin Shipping. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Pacific Basin Shipping. More…

Key Ratios Snapshot

Some of the financial key ratios for Pacific Basin Shipping are shown below. More…

Analysis – Pacific Basin Shipping Intrinsic Value Calculation

At GoodWhale, we recently conducted an analysis of PACIFIC BASIN SHIPPING’s wellbeing and have come to the conclusion that the intrinsic value of the company’s shares is around HK$2.8. This figure was calculated using our proprietary Valuation Line, which takes into account multiple factors such as financial strength, operational performance, management quality and corporate governance. Currently, PACIFIC BASIN SHIPPING shares are being traded at HK$3.1 – a fair price which is slightly overvalued by 11.9%. This could mean that investors are expecting the company to perform better than our estimates. However, with current market conditions and industry trends, it is unlikely that the stock will hold up its value in the long run. More…

Peers

In the shipping industry, Pacific Basin Shipping Ltd faces competition from Danaos Corp, Unitas Holdings Ltd, and Oceanteam ASA. These companies are all striving to provide the best shipping services to their customers. Each company has its own strengths and weaknesses, and it is up to Pacific Basin Shipping Ltd to decide how to best compete against them.

– Danaos Corp ($NYSE:DAC)

Danaos Corporation is a leading international owner of containerships, chartering vessels to a diversity of the world’s largest liner companies. The Company’s current fleet consists of 90 containerships with a total capacity of 561,060 TEU and an average age of about 9 years.

– Unitas Holdings Ltd ($SEHK:08020)

Unitas Holdings Ltd is a Hong Kong-based company principally engaged in the provision of integrated logistics solutions. The Company operates its business through three segments. The Airfreight Segment is engaged in the provision of airfreight services. The Oceanfreight Segment is engaged in the provision of oceanfreight services. The Land Transport Segment is engaged in the provision of land transport services. The Company also provides other value-added services, including warehousing and storage, insurance, customs clearance, packing, as well as other ancillary services.

– Oceanteam ASA ($LTS:0HJ5)

Oceanteam ASA is a leading offshore shipping company that specializes in the ownership and operation of offshore support vessels. The company has a market cap of 67.4M as of 2022 and a Return on Equity of -8.54%. The company’s vessels are used for a variety of offshore activities including oil and gas exploration, construction, and production.

Summary

Pacific Basin Shipping has recently announced a 10% increase in revenue for 2022, however, earnings per share (EPS) failed to meet investor expectations. This news has been met with largely negative sentiment, and the stock price has dropped accordingly. Investors should carefully analyze the company’s financials, as well as its competitive landscape and outlook for future growth, before making any decisions about investing in the company. With a potential dividend yield of around 4%, Pacific Basin Shipping appears to be an attractive option for long-term investors.

However, further research is necessary to determine whether this potential reward justifies the risk involved.