https://fbx.freightos.com/ (for 40 feet container)
Drewry - Service Expertise - World Container Index - 02 Feb
Frieght rates back to normal after euphoria period of 2 years.
Expect a weak quarterly result this time. Waiting for what management has to say on future growth and Africa projects.
Disc: Invested, reduced position size by 60% in last 30 days.
Q2 Concall Notes
Added 610 TEU in last september. 15181 total available as of 30th Sep. The old target of 24K TEU hasnât slipped, there is a delivery time of 3 - 4 months. We will reach this number by FY25.
Exploring new geographies. Started operations in Latam. Didnât start operation in middle east due to Israel & Hamas war. Wonât have direct operations in Africa, only through agencies.
Vessel operation will start by around January as part of fully owned subsidiary Lancia. Vessel operation will greatly boost the revenues and have higher margins. Starting with 1 vessel, plan is to add a couple more as funds accrue.
Acquired 60% of Transco. They have a good freight forwarding network and experience with operating vessel. They donât have vessel or TEU, just people. They will join our office by end of this year.
Regarding FCCB - In total 250CR were raised. 50% converted and expecting remaining to be converted by march 24.
Revenue target of 1000cr by FY24 has slipped by a month due to a couple of reasons. Mainly delay in acquiring the vessel and sharp decline in freight rates. Expected to reach by Q1 FY 25.
disc: invested
In continuation with our announcement dated July 13, 2023 & 26th September 2023, Pursuant to Regulation 30
of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, this is to inform you that Lancia Shipping LLC (Dubai Based out), the 100% Wholly owned
Foreign subsidiary of Lancer Container Lines Limited has entered into a Joint Venture & formed a subsidiary
company named ARGO ANCHOR SHIPPING SERVICE L.L.C which would be catering into Freight
forwarding & Liner operations business.
Isnât a JV between two entities? In this company announcement the other companyâs name isnât mentioned. Just Lancer & the newly formed JV âArgo anchor shipping service llcâ
Further in the notice the ownership details of the JV reads
300000 UAE Dhirams âLancia Shipping LLC holds- 51% equity holding & Mr. Fauzan Chataiwala holds - 49% equity holding
Fauzan Chataiwala is âson of directorâ as per RPT in ARâ23. Mr Fauzan Chataiwalaâs LinkedIn profile says he is âDirector at Lancerâ. ARâ23 doesnât list him as a director.
Red flag?
I am mostly sure that I have seen ads of lancer container on youtube telling how this stock is a good stock.
Also the no of shareholders has increased drastically near its bonus issue.
It is a big big red flag.
Why is it a big red flag?
As I understand, any company would want their share price to be as high as possible. Further individual investors can promote a company for their personal gains.
The video had no face and it was talking about bonus issue as a benefit.
Any decent company will put ads of its products to increase sales which result in increase in share price.
If for any company if we see ads talking about its technicals or bonus issue, it is done with an intention.
Ads are costly in general and financial category ads are costliest. Retail donât have this money.
It is more likely to be done by operator or promoter who want to dump(or even exit) the stock.
I think many other people might have also seen the ads of this company. They can confirm the content of the ads
Disclaimer - I might be wrong. Use your own judgement.
As far as I can see, the ARGO ANCHOR SHIPPING JV is takes 49% of the profits out of freight business without requiring the other part of the JV to bring anything on to the table. The other half of the JV is with the son of a KMP.
The other JV with LOTUS CONTAINER SHIPPING SERVICES again takes away 49% of the PAT from the Vessel operations with no transparency regarding what, if anything, Lotus Shipping brings to the table.
The company has done well and I wish they continue to do well in the future but stripping away 50% of the profits for free is a big red flag for me.
There are more opportunities available in the market.
Anyone planning to attend their conference call next week?
Update: The management clarified in the concall that the cost of the vessel is 7 million $ and the cost was split between Lancer & Lotus in the same proportion as the ownership in JV which is 51:49. => 30cr of cost borne by Lancer.
The profit sharing will happen in the same ratio.
disc: had exited earlier, will reconsider adding it back.
Question : Beyond the container expansion, are there any ongoing projects or initiatives that could significantly impact the companyâs future performance?
A K Chataiwala: Yes, let me tell you, weâve already booked about 1,200 containers starting from April. For the year 1,200 brand new containers, weâve given to one company in Ahmedabad. Weâve just signed the agreement. So youâll be finding for the next year an increase in the revenues and the profits. Apart from that, in China, most probably you will be finding an announcement of, I think, Lancer placing an order for about 2,000 containers, brand new containers in China. So if you see taking all that into consideration, youâll be finding an increase in the revenues and the profits accordingly.
Question :What is the expansion plan beyond this container? Do you
have any ongoing projects or what are the initiatives you would like to take for the companyâs future performance?
A K Chataiwala: Now, let me tell you the future. We have already said what we plan is basically we plan to the containers to more than 40,000 to 50,000 containers. Going forward, we are also getting into vessel operations also.
So, the first vessel most probably should be in a couple of months, you can say the first vessel should be there. Then as we go forward, we might see where we can see new avenues to increase our revenues and profitability.
Question on QIP, New vessel and Operation time line?
Praful Jain: You see, thereâs multiple questions which you have put across all together. I just go one by one. Coming to the QIP, the size is INR300 crores, which we are planning to do, and this is the entire money will be utilized for buying containers, which include liquid tankers as well as the standard dry containers.Now, coming to the vessel side, as I told earlier also, we are planning to do a vessel operations, most of from other self-accruals, and some of the money is been planning to be infused by the
promoter also, which will be put into the vessel side. And this vessel should be like 12 to 15-year-old vessel. We have, we are already looking into this vessel and hired a captain who is specialized more than 30 years into this vessel operation So, once we identify, we already identified two-three such vessels and weâre just looking to
which is much more feasible to take into our operation side. And then, second thing comes to transfer this money through the ODI route to my subsidiary and making this operational. So, I think, I believe within six-months period, we can be able to start these operations from the vessel as well.
Lancer Q3 Press release.pdf (1.5 MB)
Hi,
Minerva ventures who received equity shares through FCCB conversion, 2 days ago sold almost full quantity. Why would someone sell shares just after conversion to equity and apparently in loss (if the managenment is honest and business is growing)? Am I missing here anything? Can someone whoâs following the company put light on this?
To my knowledge and understanding the business is growing and they have ambitious expansion plans. Higher EBITDA than the peers. For 1500 Cr MCap company 23% FII holding is not normal, though no DII holding. Hearing 3-4 concalls(right from the 1st concall) of this company, Iâve always found Mr. Abdulkhalik Chataiwalaâs voice determined and confident. Now want to understand if itâs wiser to hold longer.
Looking forward to diverse views.
Thanks
Disc - Invested from lower levels and have been holding from last 3 years.
Who was the buyer of Minerva Ventures shares ?
Minerva shares likely buyer - Quant Active MF holds 5,780,096 shares as of Mar 31.
Given they hold ~2.5% of shares, and it did not come up in the bulk/block deals list, they have acquired through multiple entities. This is interesting, they purposefully avoided showing up in the list.
I have Gone Through why Quant MF Might Have Bought ?
Container Jumped to 18400 TEU and on before 14000 TEU company was Roughly Doing Rs 750 Cr -850 Cr Business on 60% Capacity Utilization ,Now Badly Topline Impacted due to Freight Rates Decline ( Last 4 Con call Read and Tired of Hearing This) if Freight Rates Improves whenever and with Increasing Container Topline May Cross Rs 1000 Cr Easily.
Company will have Negligible Debt after Bond turned into Equity by FCCB which will Increase the Profitability As Hardly any Finance cost will impact.
Company Able to Maintain OPM% due to some Booking Slot Advance Strategy (Still Could not Understand, But Example given by A.K Chatiwala about Rs100 -Rs 80 = 20% ) due to Better Service . so able to maintained PAT despite Fall in Topline.
Container Market Expected to Grow at CAGR of 7.5% FY22-27 due to Rising imported Goods, Flourishing E-commerce etc
Used Bond Money To Form Subsidiary in Dubai Lancia LLC To enter into new region will increase incremental share and will help to maintain opm% and in next 2 years Will Increase
Negative Working Capital due to no Credit Business so not working capital required so no impact on cash flow.
If Company double the capacity the cost may increase just 2%-5% of the sales but profit will jump many fold up (Operating Leverage )
Buying Vessel which will handle 600-800 Container and help to discover new Region and Customer.
Lancia subsidiary will start contributing from oct 2024 ( Hope SoâŚAlways Delayed)
Looking for Liquid Container operation in near term ( i do not know why ,should focus on 1 thing First)
Expecting 35% Growth in Gross margin once vessel becomes Operational
30000 TEUs will be added in next 2 years for this QIP Rs 300 Cr ( That means Topline Must 3X from Here once done and able to do what they are Planning)
Acquired Transco Logistics 60% will increase the Freight Forwarding Contribution from 10% Of Topline to 20% in near Term
This is what i Believe Quant Might have seen Before Buying if worked stock will 2X-3X in next 18 Months
I have Spent 2 days Reading 2 annual report and 4 Con Calls : I am just Following No Postion Made
Lancer containers ltd has been affected significantly becouse of freight rate rises and red sea crises itâs also cyclical buisness so i think the downturn has long started and according to me itâll be over sooner lancer has good balance sheet management is doing good job since 2011 , digged in alot about the company not taken position yet Iâll get into it at mcap of 800 cr , place your opinions they are always usefull thank you guys
Though looks reasonable in valuation, fundamentals are good too, OPM is alright too, they are into expansion mode.
But stock price is falling heavily, promoter diluting too much stake at the sametime buying from lower levels too.
Confused about it.
Disc- Invested and confused
Is there any negative news that is causing stock to crash since several weeks? I didnât find any.
Disclosure: Holding from Rs 3. Not SEBI registered. Please do your own due diligence.
Weâre in the same boat.
Thatâs true , i think around 25 per share itâd be wise to put a bet on it itâs gonna be heads i win tails I donât lose much type bet
Iâm holding it from much lower levels, saw 30x of my investment. Iâm bullish on Abdul khalik Chataiwala more than the sector itself. I donât know if my bullishness is justified.
