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Monday, January 29, 2018

[Bonescythe] The Pearl of the Harbour

Author: moneyKing | Publish Date: 28 Dec 2017, 9:28 AM

As the new year is coming, our investment portfolio should also reflect a new change and new direction which move according to the trend of 2018. For this, I had to tell you that Harbour Link Group Berhad (Harbour - 2062) can be one of the shining star to be looked upon coming in to the year 2018.

I had shown you that Harbour technical chart had actually hit rock bottom, and started to rebound from it's bottom consolidation with a solid break out towards RM 0.75. So what is the underlying recipe for Harbour to start moving upwards despite a mixed opinion on the global shipping industry which is biased towards a negative outlook?

If you are not well verse on the shipping industry, then I could probably brief you a little with my easy to understand knowledge for you to absorb. Shipping industry can be categorized into many different category, such as dry bulk (which carries commodity) and container shipping. For the case of Harbour, we are referring to container shipping.

In container shipping, there is a need to understanding different size of ship. For an easy understanding, here is an attachment from Wikipedia for you to know the difference in container shipping. As for the case of Harbou, it is definitely talking about Feeder category which carries around 1000 TEU. ( Container ship capacity is measured in twenty-foot equivalent units (TEU). Typical loads are a mix of 20-foot and 40-foot (2-TEU) ISO-standard containers, with the latter predominant.)

Now, why I think Harbour can be a next superstar for 2018 like GCB did in 2017.

Well, it is very simple.

First, the container shipping rates for smaller ship (Below 3000 TEU) had recovered. According to the global container shipping rates for a 1700 TEU vessel, it had recovered from a lowly 6150 to the current 8300, which is a 35% increase.

I had to tell you that a 35% increase in shipping rates is very strong and will be greatly impact the revenue and profit for the shipping company which fall in this category. For this case, Harbour will not be left out because their ship is in this category.

I do not know if you believe or not Harbour share price can be heading to RM 1.00, but I had to tell you that the 1Q of 2018 will be seeing China and Hong Kong citizen throwing big celebration for Chinese New Year, which will see the 2 country having official public holidays for 1 week. For this reason, there is all the reason for me to believe that the country will have to do all the restocking and imports before the celebration, which will be a major push demand towards the container prices.

Incidentally, Harbour will also be servicing both China and Hong Kong routes, which will make things look even better for Harbour now. If that squeeze happen, the container freight rates could possibly move towards 10000. Who knows, right ?

I had pointed out an opportunity for you now. Whether you want to act on it or not, that again, is your own decision to make. Of course be remembered that all investment decision, is by your own accord. This is just a piece of referencing material for your knowledge on the happening of the industry.

Whatever it is, if you do read my article and try to understand it, I would hope that you would now learn something, or if better, you might think that you are feeling like a shipping expert already. Next time when you are talking to your colleague, friends or relative about shipping industry, then you can spill out some shipping terms like TEU, Panamax, Feeder and etc which you will leave them in a bizarre.

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