PSL Drops Nearly 4% as Analyst Recommends Profit Taking over Tight Valuation

The share price of Precious Shipping Public Company Limited (PSL) fell ฿0.90/share or 3.86% to ฿22.40/share as of 12:07 local time in Thailand on August 9, 2021, with a trading value of 579 million baht.

Country Group Securities (CGS) has given a “Sell” recommendation for profit taking on PSL, expecting a weaker freight rate in the third quarter of 2021, compared to the previous quarter due to seasonality and a high base in 2Q21. Meanwhile, the valuation in share price is tightening as the current trading P/BV is at 3.0x.

CGS stated that the company reported 2Q21 earnings of 826 million baht, excluding an extraordinary item, the normalized profit was 778 million baht. PSL bounced back from a normalized loss of 310 million baht in 2Q20, while the EBITDA was 1,184 million baht, representing an increase of 695% YoY and 75% QoQ. The recovery in 2Q21 was mainly due to an increase in the average freight rate of 17,841 dollars/day (+193%YoY, +47%QoQ). Still, CGS expected 3Q21 net profit to continue growing over a high freight rate.