Company Update: 3 March 2022
Significantly undervalued amid the ongoing bulk shipping upcycle
- Strength to strength. UAG reported FY2021 net profit of US$18mn, the highest since its IPO. This was on the back of a decade-high charter rates for bulk carriers. Balance sheet has strengthened significantly, with debt levels dropping to US$84mn as at end Dec 2021 from US$114mn in the prior year period. As a result of the stellar results and stronger balance sheet, the group is proposing a final dividend of S$0.03 and a S$0.02 special dividend, bringing the total year-end dividend to S$0.05 (Ex-div 19 May 2022).
- Maintain Outperform while raising our TP to S$1.66. Despite the 100% rally of its shares over the past year, UAG’s valuations remain attractive amid the stronger-than-expected bulk carrier upcycle. Our TP implies a very conservative 0.67x FY2022F P/B, which is more than 30% discount to int’l peers who are trading >1.0x P/B.