COLOMBO DOCKYARD PLC (DOCK.N0000)

COLOMBO DOCKYARD

*Established 1982
*Sector : Construction & Engineering
*A unit of Japan's Onomichi Dockyard Company

Note : This is  a stock which has not been discussed much on the forum and the retailer interest has been less upto now.  Hope the below evaluation will help you to identify whether it is a potential or not. My objective is not to give any buy recommendation but this is for analysis only.


Watch VIDEO about DOCKYARD
https://www.youtube.com/watch?v=ppKGLgJtRMU

MISSION :

We strive:
• To be the most competitive and viable business entity in South Asia in Shipbuilding, Shiprepair, Heavy Engineering  
        and allied activities,
• To efficiently and effectively manage all our resources,
• To achieve sustainable growth,
• To enhance the interests of our Stakeholders, and thereby contribute to the pursuit of our vision.


* Highlight  'Asia's 200 Best Under A Billion . Sri Lanka Dockyard, Royal Ceramics in Forbes list : http://lbo.lk/fullstory.php nid=944882411


2010 Financials :

March 10 Eps : 3.86
June 10 Eps : 8.47
Sept 10 Eps : 11.35
Dec Eps  :        10.80 ( included tax refund)

2010 Annual EPS : Rs 30.40

*Note that there was a small dip in overal profits from 2009 Annual EPS : 31.45 ( reason explained below)

Current Trading Price : Rs 282
Current PE : 282/30.45= 9.26

Valuation :

At PE of 10 : Rs 304
At PE of 12 : rs 365
At Pe of 15 : Rs 456




Price History

At April 15th 2010 ( 1 Year ago) : Rs 288.75
At April 12th 2011 ( Now) : Rs 282

Stagnant for over 1 year!!


Discussion :

*  Negative : Ship Repair revenue  which bring higher margin of profit went down  in 2010 compared to 2009. Mainly due to
   tough competition especially from Chinese yards in the repair business.
 
   "Revenue from ship repair fell sharply to 4.2 billion rupees in the 2010 financial year from 6.7 billion rupees the previous
    year"

* Negative : As transaction are mainly doen in US$ , appreciation of rupee to a $ is bad for the company




Positive Growth prospect  and news

* Revenue from ship building shot up to 9.6 billion rupees from 5.6 billion rupees.
     http://lbo.lk/fullstory.php?nid=1710350755

* With Port expansions in Sri Lanka  more ship can be attracted helping profitability of DOckyard in the long run
* Ship repair order books full until 2012 ( http://lbo.lk/fullstory.php?nid=1710350755)

1) Sri Lanka dockyard lays keel for new supply vessel :  http://lbo.lk/fullstory.php?nid=510994458
2) Sri Lanka dockyard reveals ship repair revenue,  http://lbo.lk/fullstory.php?nid=1688309522
   CDL undertakes over US$4 million worth repairs : http://www.ft.lk/tag/colombo-dockyard/
3) Dockyard handles LPG carriers : http://www.ft.lk/2011/04/12/dockyard-handles-lpg-carriers/
   http://www.lankanewspapers.com/news/2011/4/66118.html
4) Sri Lanka Dockyard wins order for supply vessel. http://lbo.lk/fullstory.php?nid=1815862304


2 Ship delivered so far in 2011:

1) Sri Lanka Dockyard delivers support vessel : http://lbo.lk/fullstory.php?nid=1879239462
2) Dockyard completes first complex, sophisticated ROV support vessel : http://www.ft.lk/2011/02/10/dockyard-completes-first-complex-sophisticated-rov-support-vessel/
  http://www.ft.lk/tag/218th-new-ship-that-colombo-dockyard-has-built/

3 Ships to be delivered in 2011:

1) 130 T BP Anchor Handling Tug  Supply Vessel , NC/0219 Eagle High Limited, State of  Samoa June 2011 Singapore
2) 130 T BP Anchor Handling Tug  Supply Vessel , NC/0220, True Wisdom Limited, State of  Samoa ,September 2011
    Singapore
3) 100 Passenger Launch,  NC/0221,  Road Development Authority January 2011 Sri Lanka


Broker Buy recommendations

1) http://www.ft.lk/2011/01/24/stock-market-to-ride-on-flamboyant-corporate-earnings/



Top 20 Shareholders AS AT 31.12.2010

Mainly institutional interest with HNW investors.

1 ONOMICHI  DOCKYARD COMPANY LIMITED 51%
2 EMPLOYEES PROVIDENT  FUND 14.54%
3 SRI  LANKA  INSURANCE  CORPORATION LTD. GENERAL FUND 5.00%
4 SRI  LANKA  INSURANCE  CORPORATION LTD. LIFE FUND 4.99%
5 SRL  LANKA  PORTS  AUTHORITY 3.04%
6 PAINTS AND GENERAL INDUSTRIES LTD. 2.40%
7 MR.  S.E. CAPTAIN 2.10%
8 EMPLOYEES TRUST FUND BOARD 1.67%
9 PERSHING LLC S/A AVERBACH GRAUSAN & CO 0.90%
10 AVIVA NDB INSURANCE PLC A/C NO 7 0.55%
11 NATIONAL SAVINGS BANK  0.55%
12 MR. M.M. UDESHI 0.52%
13 BANK OF CEYLON NO 2 A/C 0.46%
14 PAN ASIA BANKING CORPORATION PLC/MR MORARJ MEGHJ 0.35%
15 DFCC BANK A/C 1 0.34%
16 HSBC INTL NOM LTD. JPMCB-J.P.MORGAN CLRARING CORP. 0.32%
17 LANKA MILK FOODS (CWE) LIMITED. 0.30%
18 UNION ASSUARANCE PLC  NO 01 A/C 0.22%
19 MR.  A.P.  SOMASIRI 0.21%
20 DAVID PEIRIS MOTOR COMPANY LIMITED 0.21%



TWENTY( 20)  MAJOR  SHAREHOLDERS AS AT 31.12.2009

1 ONOMICHI  DOCKYARD COMPANY LIMITED 51%
2 HORIZON  REPRESENTATION  OF  COMPANIES  LLC. 10.65%
3 HORIZON  ENERGY  LLC. 10.65%
4 SRI  LANKA  INSURANCE  CORPORATION LTD. LIFE FUND 4.43%
5 SRL  LANKA  PORTS  AUTHORITY 3.04%
6 EMPLOYEES PROVIDENT  FUND 3.02%
7 MR.  M.M.  UDESHI 1.15%
8 THURSTON  INVESTMENTS  LIMITED 1.11%
9 MISS  A.M.  UDESHI 0.75%
10 PERSHING LLC S/A AVERBACH GRAUSAN & CO 0.62%
11 BHADRA INVESTMENTS LIMITED. 0.55%
12 BANK OF CEYLON NO  2  A/C  0.51%
13 MAS  CAPITAL  (PRIVATE) LIMITED. 0.39%
14 MRS.P.N. BHATT 0.90%
15 EAGLE INSURANCE COMPANY LIMITED. 0.37%
16 LANKA  MILK  FOODS  (CWE) LIMITED. 0.30%
17 DFCC BANK 0.28%
18 MR. K.R. KAMON 0.23%
19 MR.  A.P.  SOMASIRI 0.22%
20 MR K.N.J. BALENDRA 0.21%

Interesting post SLStock. Even the great bear is impressed by DOCK. this is not a favourite among retailers. Don't think many of them have it in their portfolios. But you have highlighted some savy investors in that list of shareholders. You should highlight 6 and 7 as well. If I remember correctly the Captains weren't on the previous years list.

tubal wrote:Interesting post SLStock. Even the great bear is impressed by DOCK. this is not a favourite among retailers. Don't think many of them have it in their portfolios. But you have highlighted some savy investors in that list of shareholders. You should highlight 6 and 7 as well. If I remember correctly the Captains weren't on the previous years list.

Yes tubal. Mr Captain was not there in 2009. I highlighted it also.

Pretty convincing work Slstock.. it seems to me some high networthy investments have come into DOCK in 2010. May be they've been waiting and after some analysis they entered.. its a good long term counter that benefits with the time.. So no wonder it attracts EPF fund

Hi Slstock

Really impressive work... thanks for the links to study the company and industry... I am also stuck with this counter and thinking that it should have upward momentum due its strong fundamentals.. What is reason for stagnating long time....


Happy Trading

Great work slstock.
I managed to buy some when it was just down below Rs 250 last month & added it to my non-moving shares.

If I can remembered correctly some people were saying that Dock's docks are not big enough to either maintain or build large vassals. But I cannt see any point why DOCK wants expand it businesses to that level.
Large vessels relate businesses are dominated by Korean ship builders and currently China is trying hard to grab the market. Our country dont have resources or expertise to challenge that level.

Yes as Slstock mentions currency ($) is a crucial point. A healthy order book could also a challenging task.

But not like some other companies DOCK has proven that it is worth.

slstock thanks for highlighting, Captains are in at both 6 and 7
UKBoy, yes, DOCK's single biggest customer in the past, Shipping Corporation of India upgraded their shps and those ships cannot be accomodated in these dry docks. But they are making up for it by moving to ship building.

You are right about the market for large ships, there's no chance of DOCK being able to enter this field. The good news is that according to their annual report they have no plans of doing so and will concentrate on niche markets.

btw FYI, their order books are full till 2014.....

newbie wrote:btw FYI, their order books are full till 2014.....

Newbie,
Did you read this as an news item? If so a link would be appreciated.

Excellent work slstock. This is one of my long term investment. It should start to move as it has been stagnated for long time.

Colombo Dockyard this week ceremonially commissioned its 11th large and highly complex vessel named “Greatship Rohini” in Colombo. Several VIPs were present at the event. The company says it has received orders worth US$ 240 million to build several ships.

http://sundaytimes.lk/index.php/business-videos/4803-colombo-dockyard-commissions-11th-vessel

It is a bit rare to see some senior guys agree & recommand a company on this forum. Therefore I think this a worth medium term investment. Thanks for the topic slstock.

http://www.cse.lk/cmt/upload_cse_announcements/8331303815866_.pdf

http://www.lbo.lk/fullstory.php?nid=1678005469

UKboy wrote:Great work slstock.
I managed to buy some when it was just down below Rs 250 last month & added it to my non-moving shares.

If I can remembered correctly some people were saying that Dock's docks are not big enough to either maintain or build large vassals. But I cannt see any point why DOCK wants expand it businesses to that level.
Large vessels relate businesses are dominated by Korean ship builders and currently China is trying hard to grab the market. Our country dont have resources or expertise to challenge that level.

Yes as Slstock mentions currency ($) is a crucial point. A healthy order book could also a challenging task.

But not like some other companies DOCK has proven that it is worth.

You should reread what you wrote back then

rainmaker wrote:
You should reread what you wrote back then

You must be missed a hell of a lot posts to read since then?  take ur time n go through.

I had sold entire my PF latter part of 2011 n early 2012. (With proven comments).

http://forum.srilankaequity.com/t15140-post-mortems-favourite-shares-frustration-and-at-last-the-last-few-options-remaining

I'm not interested with SL market at the mo. just few counters in my local pf. Money wise its not that worth. Hence time is more important to me.

GL.

There is a possible of dock going past 60/- by coming week.

Reason???

Bdcdman wrote:Reason???

ECONOMYNEXT – Colombo Dockyard has delivered a submarine cable-laying ship for Japan’s Kokusai Cable Ship Co. Ltd., its biggest and most sophisticated vessel, and says it wants to bid to build a dredger for a Sri Lankan government agency.

The high-technology “KDDI Cable Infinity” is meant for subsea operation and cable installation and repair works of both optical communications and power cables, the yard’s managing director and chief executive D.V. Abeysinghe said.

Having delivered the first vessel of this type after a two-year period, Colombo Dockyard can now bid to build similar vessels in future, under its strategy of building more sophisticated vessels in niche markets, he told reporters. 

Colombo Dockyard won the contract from Kokusai Cable Ship Co. against competition from other Asian yards including from Japan, Singapore and Malaysia, he said. 

Yukihiro Fujji, who represented Kokusai Cable Ship Co. (KCS), the Japanese owner, at the delivery, said there was plenty of work for cable ships with more undersea cables being laid for both fibre optic communications and power transmission.

About 99 percent of Japan’s internet traffic goes through submarine cables, said Fujji, board member and director of engineering and facility planning department of KCS, part of the big Japanese telecom operator KDDI Corporation. 

Build quality, delivery time and price were factors considered in awarding the contract to Colombo Dockyard, he , told economynext.com.

The home port of KDDI Cable Infinity, which can operate globally, will be Kitakyushu, the northernmost city on Japan’s southern Kyushu Island, from where it will do cable installation and repair in the Asia-Pacific region. 

Abeysinghe, of Colombo Dockyard, which is majority owned by Japan’s Onomichi Dockyard Company, said the yard also wants to bid for a dredger which Sri Lanka Land and Development Corporation (SLLRDC) is to buy.

SLLRDC, now renamed Sri Lanka Land and Development Corporation, wants the dredger for sea sand mining to meet growing requirements of the construction industry as sand stocks on land get depleted.

But Abeysinghe said a contract condition specifying previous building experience restricted Colombo Dockyard from bidding for the dredger deal.

“We would like this condition removed because if we don’t get the first ship in any type of ship building activity, we will never gain the experience to build them.” 

Minister of Ports and Shipping Sagala Ratnayaka said the ministry would lobby for removal of the prior experience condition.
A Dockyard statement said ‘KDDI Cable Infinity’ is diesel electric driven, another first for the yard, with power provided by four generator sets, developing 2,300kW each, and a range of 10,000 nautical miles

The basic design and production drawings for the construction were supplied by VARD Designs, Norway, and the vessel is built to ClassNK classification society standards and meets the regulatory requirements of the Japanese government.
(COLOMBO, 22 June, 2019)

Colombo Dockyard (DOCK) Hidden Gem
With this past trend Should trade above 100 with in Few Days

One should have in his portfolio

DOCK Should Adjust to 100

Buy at low Price Sell at High