INITIATION REPORT

Singapore

Samudera Shipping Line Monday, 24 October 2011 (SAMU SP; SAMU.SI )

Buy Pri ce a s of 6 Jul 2015

0.275

12M ta rget pri ce (S$)

0.370

Previ ous ta rget pri ce (S$)

-

Ups i de, i ncl di v (%)

38.8

Trading data Ma rket Ca p (S$m)

148.3

Is s ued Sha res (m) Ave Da i l y Tra ded (3-Month) Vol / Va l

539.1 0.5m / $0.1m

52 week l o / hi

$0.14 / $0.35

Free Fl oa t

34.8%

Major Shareholders PT Sa mudera Indones i a

65.3%

SAMU SP (Blue) vs. FSSTI 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05

3,700 3,500

3,300 3,100

May-15

Jan-15

Mar-15

Nov-14

Jul-14

Source: Bloomberg

Sep-14

May-14

Jan-14

Mar-14

2,900

Sail with this nimble & resilient ship We initiate coverage on Samudera Shipping Line (Samudera) with a BUY recommendation. The company has managed to recover from a tough year in FY13 to post a six year record net profit in FY14. We expect this year to be another record breaking year. We see Samudera benefiting from the influx of mega container ships that are leading to higher demand for feeder services. Hence, we believe Samudera to be a well positioned ship to ride this wave of upswing in the feeder services segment, more so given its undemanding valuations compared to peers. Nimble company with good operational track record. Samudera is an experienced shipping operator with more than 20 years of operations in Asia. Since listing in 1997, it has managed to stay profitable except only for FY09 (overall downturn in shipping industry) and FY13 (due to unprofitable shipping routes and vessels that the group disposed in FY14). Its quick turnaround back to profitability after a year of loss highlights the group’s key strength of being able to quickly adapt to changes within the shipping industry. Competitive advantage to service Asian trade with its smaller vessels. Samudera’s current fleet of smaller sized vessels places it in a good position to operate in the region’s limited port infrastructure, where bigger vessels are unable to operate in. We see the ongoing trend of mega container ships (~18,000 teu) creating more demand for Samudera’s feeder services (1,0002,000 teu). Container shipping showing early signs of improvement. Global trade is well alive despite patchy economic growth around the world. Global economic growth is expected to pickup next year to 3.8% (IMF estimates). World seaborne trade grows at a much faster pace of 1.13 times the world economy, according to Clarksons. Another positive factor in container shipping is the improving supply/demand balance of container vessels ordering of new container ships is slowing down while demolitions of old vessels is increasing. This is a positive trend that may eventually lead to a better supply-demand balance in the container shipping industry. Financials & Key Operating Statistics

Joel Ng [email protected] +65 6236 2630

YE Dec (US$ m) Revenue Gross Profit PATMI Core PATMI Core EPS Core EPS grth (%) Core P/E (x) DPS (SG cents) Div Yield (%) Gross Margin (%) Net Margin (%) Gearing (%) Price / Book (x)

2013 391.2 9.2 -2.2 -2.2 -0.4 -156.4 -50.0 0.0 0.0 2.4 -0.6 52.3 0.5

So urce: Co mpany Data, KGI Fraser

Please see important disclosures at the end of this publication

2014 364.2 31.7 14.3 14.3 2.7 -751.2 7.7 1.8 6.4 8.7 3.9 32.8 0.4

2015F 368.5 35.0 18.1 18.1 3.4 26.4 6.1 0.9 3.2 9.5 4.9 23.1 0.4

2016F 403.4 36.3 18.6 18.6 3.5 2.9 5.9 0.9 3.2 9.0 4.6 15.5 0.4

2017F 442.2 39.8 20.7 20.7 3.9 11.5 5.3 0.9 3.2 9.0 4.7 6.7 0.4

Singapore

Samudera Shipping Line

Table of Contents Page Company overview ............................................................................... 3 Resilient business model ...................................................................... 5 Strong balance sheet and cash flows .................................................... 7 Tapping on the growing feeder services in Asia .................................... 8 Forecast and assumptions ................................................................. 11 Valuation ............................................................................................ 14 Key catalysts and risks ........................................................................ 15 Summary of Financials ........................................................................ 16 Appendices: ....................................................................................... 17 Key Management .........................................................................17 Vessels in Samudera’s fleet ..........................................................18 Service network ...........................................................................20 Peer comparison and performance .............................................21

July 7, 2015

2 $ 222

Singapore

Samudera Shipping Line

Company Overview History Samudera was incorporated in 1993 and has established activities mainly in Southeast Asia, the Indian subcontinent and the Far East. The group has two key business segments: a) container shipping and b) bulk and tanker shipping. Samudera is a part of Samudera Indonesia Group. This allows the group to tap on the marine and land transportation infrastructure of its parent company to provide value added services to customers. The group’s strengths rests mainly in its shipping feeder services (85% of its revenues) between hub ports, such as Singapore, and other smaller ports around Asia. It is headquartered in Singapore and has regional offices in Indonesia, Cambodia, China, Thailand, Vietnam, Malaysia, Myanmar and India. Samudera owns 26 vessels and also charters in another 19 vessels, giving it the flexibility to adjust its fleet size to market conditions. In total, it has 45 vessels consisting of 28 container vessels, 2 oil tankers, 7 chemical tankers, 2 gas tankers, 5 marine offshore support vessels and 2 dry bulk carriers. The group sees growth opportunities in other segments such as LNG shipping in the region and may look to expand its services in the future.

Figure 1: Samudera’s diversified fleet servicing the Asian region Vessels Conta i ner ves s el s Oi l ta nkers Chemi ca l ta nkers Ga s ta nkers Ma ri ne offs hore s upport ves s el s Dry bul k ca rri ers Tota l

Owned 13 2 7 2 1 1 26

Chartered 15

4

Total Capacity 30,433.0 35,392.0 38,292.0 147,260.0 2,676.0 114,700.0

Unit TEU DWT DWT CBM DWT DWT

19

Source: Company

Figure 2: Samudera’s established service network in Asia

Source: Company

July 7, 2015

3 $ 333

Samudera Shipping Line

Singapore

Established experience as a shipping operator in the Asian region 1993

Incorporated in Singapore for container shipping business

1994

Began feeder routes in Jakarta, Indonesia and Bangkok, Thailand.

1995

Extension of network to India, Sri Lanka, Philippines, Malaysia and other Indonesian ports.

1996

Entered into bulk and carrier & tanker business through Singapore subsidiary, Foremost Maritime Pte Ltd

1997

Listed in Singapore Stock Exchange. Expanded to China, HK and South Korea.

1998

Expansion to United Arab Emirate (UAE). Commended by PSA for being part of the list of top 10 achievers of throughput amongst all vessel operators that call at Singapore terminals.

1999

Expanded to Indian sub-continent. Additional capital of S$32.9m raised through share placement.

2000

Samudera upgraded to main board of SGX. Began bulk carrier & tanker business in Indonesia through PT Samudera Shipping Service.

2008

Took delivery of 5 newbuild container vessels to serve regional and Indonesian domestic container shipping market.

2010

Remained top 10 vessel operator in terms of container throughput calling at terminals of PSA.

2011

Acquired 3 container vessels to strengthen Indonesian domestic market presence. Took delivery of 2 Supramax bulk carriers.

2012

Expanded service offerings to include ship manning, vessel operation and maintenance management for a major oil and gas company in Indonesia.

2013

Samudera recorded a loss of US$2.1m as revenues declined following lower freight rates and consolidation of services.

2014

The group’s initiative to restructure its network and lower fuel costs sees the group recover healthily to its highest net profit

Source: Company

July 7, 2015

4 $ 444

Singapore

Samudera Shipping Line

Resilient container shipping company in a growing region Samudera’s business is mainly derived from container shipping (85% of total revenues in the last 5 years), with bulk and tanker container contributing the rest. After years of growth following the global financial crisis in 2008/2009, revenues declined in 2013 as the container shipping industry grappled with overcapacity and as its Indonesian business dragged down performance. However, the group has been quick to turnaround whenever it faced challenges, highlighting what we believe is an experienced management team that knows how to adapt to the competitive shipping environment. The group’s operations mainly serves the Southeast Asian markets, with Indonesia making up half of total revenues. Samudera’s current fleet of smaller sized vessels (1,000 to 4,600 teu) places it in a good position to operate in the region’s limited port infrastructure, including Indonesia and India. Close to 85% of the cargo Samudera carries come from feeder services connecting hubs such as Singapore with other smaller regional ports.

Figure 3: Container shipping makes up the bulk of revenues 500 74

US$ m

400 300

376

58

65

398

308

65

54

53

52

306

306

315

324

2014

2015F

2016F

2017F

54

323

2013

200

100 0 2010

2011

2012

Container Shipping

Bulk and Tanker

Source: Company

Figure 4: Most of its revenues are from the fast growing markets in the ASEAN region 500

US$m

400 300 200 100

118

129 109

87 210

108

212

174

161

141

0 2010

2011

2012

2013

2014

Indonesia

Southeast Asia (exc Indonesia)

Middle East and Indian Sub-continent

Far East

Others

Source: Company

July 7, 2015

5 $ 555

Singapore

Samudera Shipping Line

Coming out stronger after FY09 and FY13 Samudera’s losses in FY09 and FY13 were mainly because of macro factors that affected all container shipping companies. Almost all major container shipping companies registered losses (Maersk, China Cosco, China Shipping, Mitsui, Evergreen, Neptune) in 2009 and continued struggling with profitability from 2011 to 2013 (Figure 5). The decline in oil prices in 2014 benefitted most shipping companies, including Samudera. However, Samudera has more importantly improved its operations for sustainable growth in the long term during this period. This includes actions such as removing unprofitable shipping routes and taking an asset light strategy by chartering in vessels. Figure 6: Samudera has emerged leaner and stronger after a year of streamlined operations

Figure 5: Main shipping operators average operating margins have been weak since 2011 to 2014

20

US$ m

15

14.3

12.6 9.4

10

4.2

5 0 2010

2011

2012

(5)

2013 -2.2

2014

Net Income Source: Company

Source: BIMCO, Alphaliner

Decent dividend yield with upside potential Samudera is currently yielding around 6% (based on FY14 pay out of 1.75 SGcents). The group paid out 1.75 SGcents dividend per share in FY14, compensating for the missed dividend in FY13. We understand that Samudera has a dividend pay-out policy of at least 20% of net profits. We estimate that the group can pay out at least 30% of net profits based on its healthy balance sheet, strong cash flows and track record of 30% payout ratio. This would imply a decent dividend yield of 3%, with upside potential when the container shipping industry improves. Figure 7: Decent 3% dividend yield with potential when container shipping improves 6.6

DPS - Cents

1.5

7.0 6.0 5.0

4.0

1.0

1.8

2.5 0.5

2.0

1.5

1.2

0.5

0.3

0.2

2010

2011

2012

0.0

3.0

net DPS - (cts) SGD

1.0

0.0 2013

Dividend Yield %

2.0

0.0 2014

Dividend yield (%)

Source: Company

July 7, 2015

6 $ 666

Singapore

Samudera Shipping Line

Strong balance sheet and cash flows One of the lowest geared shipping companies among peers Samudera has been strengthening its balance sheet in the past four years. It has lowered its net gearing from 0.7x to 0.3x as at end FY14 and we expect it to drop further to 0.1x by end FY17. Its free cash flow has also improved over the last three years, from negative free cash flow of US$65m in FY11, to a healthy US$37m free cash flow in FY14. The unusually high US$82m capex spend in FY13 was primarily invested to capitalize on the Indonesian Cabotage law, by increasing its Indonesia-flagged vessels for the domestic container shipping market. Capex is expected to be minimal at around US$15m p.a. going forward as it employs a more flexible business model of chartering in vessels. Compared to its peers’ net gearing levels of 1.5x on average, Samudera’s 0.3x net gearing gives it a lot of headroom to raise more debt to fund expansion plans. One area of expansion may include the LNG tanker business. The group already has one foot in the door with a 25% stake in a LNG tanker that has a long term contract secured. Another potential expansion could include acquisition of distressed assets. Figure 7: Improving free cash flows have allowed it to strengthen its balance sheet 60 37

40

US$ m

20

24

16

9

0 (20)

2010

2011

2012

2013

2014

(40)

(60) -65

(80)

Free cash flow Source: Company

Figure 8: Low debt levels allow for more room to grow 80.0

75.4 66.3

70.0 60.0

54.9

52.3

US$ m

50.0 40.0

32.8

30.0 20.0 10.0 0.0 2010

2011

2012

2013

2014

Net gearing (%) Source: Company

July 7, 2015

7 $ 777

Singapore

Samudera Shipping Line

Tapping on the growing feeder services in Asia World seaborne trade grows faster than the world economy Growth is expected to be volatile with diverging trajectories in different regions. Regions such as North America are showing signs of growth, offset by weak economic data in Europe, Japan and China. Despite the uneven growth, global economic growth is still expected to pick up next year to 3.8% according to the IMF. Overall, the big picture is still expected to provide for a positive case for container shipping services.

Figure 9: World seaborne trade grows faster than world GDP growth

According to Clarkson Research Services, world seaborne trade has historically increased faster than world economic growth by around 1.13 times over the past 5 years. While the world’s economy is expected to grow by 3.5% YoY in 2015, world seaborne trade could grow at a faster pace of 4.1% YoY.

Source: UNCTAD

Demand/supply in container shipping is improving as new orders slow down and demolition of older vessels increase The orders for new container ships are slowing down. In 1Q15, the number of containerships being ordered has declined 48% to 301 total containerships in 1Q15, according to data by IHS. Orderbook as a percentage of total capacity has dropped to 17% as compared to 33% from 5 years ago, a positive sign for the industry. Another positive trend has been the increase in number of vessels being demolished, from around 450 per quarter in 2010 to 1080 per quarter in 2015. Overall, the slowdown in new orders and the increased removal of older vessels is a positive trend that may finally lead to a better supply-demand balance. The feeder services is also in a better position given that most of the current orders are for larger container vessels. Figure 10: The slowing orders for vessels is positive for the supply-demand balance

45 40

37 33

35 29

27 27 26 26 26 26

24

30 22 21 21 20

20 20 19 19 18 18 17 17 17

25 20

15 10

Orderbook % of DWT

39

5 2010 Q2

2011 Q2

2012 Q2

2013 Q2

2014 Q2

0 2015 Q2

Orderbook as a % of DWT Source: IHS , KGI Fraser

July 7, 2015

8 $ 888

Singapore

Samudera Shipping Line

Temporary boost to margins from lower bunker fuel prices Bunker fuel prices are closely correlated to oil prices. As a result of the decline in oil prices, bunker fuel prices are now around 35% lower YoY. The lower bunker fuel costs has benefitted shipping companies’ profitability because fuel costs typically make up between 40% to 70% of shipping companies operating costs. Although shipping operators have benefitted from the lower bunker fuel costs in 2014, cost savings are eventually passed on to customers who demand lower freight rates for new contracts. Thus, in our forecasts, we assume lower gross and profit margins in later years to take this into account.

Figure 11: Cost savings are eventually priced on to customers

650 600 550 500

450 400 350 300

Bunker Index 380 Source: Bloomberg, KGI Fraser

The chart below shows the effect of lower bunker fuel prices on the shipping industry. We saw improvements in gross and net profit margins across the board in the 12 container shipping companies that we analyzed. But this is only temporary as we are starting to see cost savings passed on to customers.

16 11

8 11

1

11

1

(4)

(1)

(1) (3)

0

(2)

(1)

(5) (7)

FY13

FY14

Samudera

Yang ming marine

Hanjin shipping co

Hyundai merchant

Wan hai lines

Kawasaki kisen kaisha

Orient overseas intl

(12)

Nippon yusen

China shipping container-h

1

(9)

(8)

Mitsui osk lines

(9) (14)

4

4

Evergreen marine corp

1

3 01

4

3

Neptune orient lines

6

China cosco holdings-h

Net Profit Margins (%)

Figure 12: Net profit margins improved across the board in FY14

Source: Bloomberg, KGI Fraser

July 7, 2015

9 $ 999

Singapore

Samudera Shipping Line

Feeder services to benefit from more mega container ships and growing intra -Asian trade Samudera stands to benefit from the new mega container ships (ultra-large container carriers) being ordered by the major container shipping companies. New vessels being ordered has reached a new size milestone of 20,500 teu and are unsuitable for domestic ports around the Asian region. As a result, new feeder routes are increasing to handle intra-regional trade. Feeder services freight rates are holding up well compared to major shipping lanes. The main reason for the drop in freight rates in major shipping routes may be attributed to the continuing oversupply with container vessels and the decline in Chinese trade with external countries. Intra-Asia, however, is supported by economic growth in the Asian region. According to forecasts by IHS, the ASEAN region is projected to be the fourth largest economy by 2050, after China, India and the United States. Its population of 600m makes it larger than the European Union or North America. Samudera operates in all the major ASEAN countries, which include Singapore, Malaysia, Thailand, Vietnam, Myanmar, Cambodia and the Philippines. GDP growth has averaged 6% over the past 4 years, benefitting the intra-Asian trading routes. From 2010 to 2013 (latest data provided by ASEAN), merchandise trade in the region grew from US$ 1.1bn to US$2.5bn, or a CAGR of 7.7% over the period. Growth in GDP per capita has outpaced the rest of the world and with that, consumer demand. This is evident in ASEAN imports growing at 9.0% CAGR from 2010 to 2013. ASEAN accounts for 7% of global exports, with expectations that this will increase as manufacturers shift production from China to lower cost alternatives including Malaysia and Vietnam. ASEAN trails only the EU, North America and China/Hong Kong as the largest exporting region in the world. Another positive trend for regional trade is the specialization of countries in the products they manufacture and export: Malaysia and Singapore in electronics and petrochemicals, Thailand in automobiles, Vietnam in textiles and apparel and Indonesia in commodities.

Figure 13: Riding on the growth in the ASEAN region

Indi ca tors Total land area

Uni t

2010

2011

2012

2013

km2

4,435,670

4,435,674

4,435,617

4,435,618

thous a nd

600,291

609,161

617,165

625,091

US$ mi l l i on

1,884,068

2,184,833

2,321,075

2,395,253

percent

7.8

4.9

5.8

5.2

US$

3,139

3,587

3,761

3,832

US$ mi l l i on

2,009,116

2,388,444

2,476,427

2,511,517

Export

US$ mi l l i on

1,051,614

1,242,199

1,254,581

1,271,128

Import

US$ mi l l i on

957,502

1,146,245

1,221,847

1,240,388

US$ mi l l i on

100,360

97,538

114,284

122,377

thous a nd

73,752.6

81,229.0

89,225

98,016

Total population Gross domestic product at current prices GDP growth Gross domestic product per capita at current prices International merchandise trade

Foreign direct investments inflow Visitor arrivals Source: ASEANstats, ASEAN Secretariat, KGI Fraser

July 7, 2015

10 $ 101010

Singapore

Samudera Shipping Line

Forecasts and assumptions Key drivers for revenues and profit margins Revenues are driven by total volume handled and freight rates. Samudera has fared much better in its freight rates given that its intra-Asian service network has been less affected by the declines elsewhere (e.g. Asia-America or AsiaEurope routes). Intra-Asian container price index (Figure 15) showed a drop of 14% from peak to trough in the past 4 years, compared to a 31% drop in AsiaEurope, highlighting the more stable shipping environment in intra-Asian trade. Another positive note is that intra-Asian index seems to be stabilizing at current levels and may provide upside when economic activities pick up. Meanwhile, volume handled is a function of both the number of vessels operating in its fleet and utilization rates. Profit margins are driven by bunker fuel, vessel chartering and manpower costs. Operating costs for container vessels have been increasing at around 1% p.a. over the last three years but the drop in oil prices in 2H14 was able to improve margins considerably, such that most container shipping companies were able to turn profitable in 2014. Our assumptions and explanations for margins are detailed in the following pages. Figure 14: We assume volume to be flat this year; growth to continue next year 35,000 30,000

TEU

25,000

26,824

26,421

26,421

2011

2012

2013

24,564

27,550

27,550

2014

2015F

28,928

30,374

20,000

15,000 10,000

5,000 0 2010

2016F

2017F

Total TEU (beginning of year) Source: Company, KGI Fraser

111

112

120 109

105

104 98

96

96

97

101

101

110 98

101

100 90

94 78

83

81

79

76

80 80

81 75 70

70

70

60

CTS Container Price Index

Figure 15: Intra-Asia trade has been doing better than Asia-Europe routes

2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Asia - Europe

Asia - Asia

Source: CTS, KGI Fraser

July 7, 2015

11 $ 111111

Singapore

Samudera Shipping Line

Sustainable margins as it focuses on profitable shipping routes We estimate gross profit margins to normalize over the next few years as the group reduces unprofitable shipping routes and as freight rates recover. Our estimates for FY15-17 gross margins normalizes at 9% from FY16 onwards, around its 10 years average of 8.5% gross profit margins. This is reasonable in our view given that gross profit margins has actually improved over the recent three quarters to 9.7%, 12.1% and 10.8% in 3Q14, 4Q14 and 1Q15, respectively. For net profit margins, we estimate net profit margins to improve accordingly on the back of improved gross profit margins. We estimate net profit margins to average around 4.6% over the next three years, slightly above the average 10 years net profit margins. We see the above average margins as achievable given that pre GFC period of 2008, net profit margins were averaging 7%. From 2009 to 2014, the industry went through a painful overcapacity situation where it is slowly emerging from. In addition, FY12-13 were difficult years for the group as its Indonesian business dragged overall performance. Figure 16: We see gross profit margins improving as it streamlines operations 18

16.0%

16 14

Forecast

13.7% 11.3%

%

12

11.9%

10

9.5%

8.7% 7.6%

8

9.0% 9.0%

7.7% 6.1%

6

4.5% 2.4%

3.4%

4 2 0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F2016F2017F

Gross Margin

Average

Source: Company

Figure 17: More upside possible when container markets turn around 14

12.2%

12 10

Forecast 9.1%

8 5.4%

5.9%

%

6

3.9%

4

4.8% 4.5% 4.6%

2.5% 2.6%

2.4%

2

0.9%

0 -2

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F2016F2017F

-4

-2.7%

Net Income Margin

-0.6%

Average

Source: Company

July 7, 2015

12 $ 121212

Singapore

Samudera Shipping Line

This year may prove to be another multi-year record for earnings Revenues is expected to be flat this year as Samudera focuses instead on improving its margins. We estimate revenues to start picking up from FY16 onwards as it benefits from higher volume handled and higher freight rates. Freight rates improvement of 5-6% in FY16/17 is achievable, in our view, given the growing demand for feeder services around the Asian region. Total volume handled in 2015 is expected to be around 2014 levels as Samudera continues to reduce unprofitable lines. More positively, we estimate total volume to improve around 5% p.a. from FY16 onwards as it expands into new shipping routes such as Cambodia. We estimate that Samudera can comfortably grow its earnings by 25% YoY this year to reach around US$18m, driven mainly by higher margins. Its first quarter earnings already make up 28% of our full year forecasts. Net profit for FY16-17 is estimated to grow thereafter at 1-11% p.a. as margins begin to normalize to sustainable levels. Figure 18: Revenues to start picking up from FY16 onwards

600

Forecast

500

409 409

US$

400

353

454 468

443

377 330

391

369

403

364 368

442

300 200 100 -

Revenue Source: Company, KGI Fraser

Figure 19: FY15 net income of US$18m; 1Q15 net income already 28% of our forecast 60

50

50 40

Forecast 32 26

US$

30

20

20 10

9

10

14

12

18

18

20

4

(10) (20)

-2 -9

Net Income Source: Company, KGI Fraser

July 7, 2015

13 $ 131313

Singapore

Samudera Shipping Line

Valuation Profitable, healthy balance sheet and undemanding P/E and P/B ratios The market is pricing Samudera in line with other shipping companies such as First Ship Lease (FSLT SP) and Rickmers Maritime (RMT SP) based on P/B ratios. These companies are not comparable as they basically charter out their vessels to vessel operators such as Samudera. The association with them incorrectly undervalues Samudera’s profitable business and healthy balance sheet. NOL (NOL SP) can be considered Samudera’s closest peer as they both operate vessels in the container shipping business. However, NOL operates in the more competitive trading routes while Samudera operates in Asia’s feeder services that is seeing growing demand. Samudera’s 0.4x P/B compared to NOL’s 0.6x P/B (post APL Logistics sale) undervalues Samudera’s good track record of profitability and healthy balance sheet. Its 35% net gearing is the lowest compared to peers’ 60-200% net gearing. In terms of earnings, Samudera’s 6x FY15 P/E is around half of SG and international peers. With all the right ingredients in place including improving profitability, healthy balance sheet and earnings/book multiples at deep discounts to peers, we see Samudera as an attractive and stable ship to sail with. Taking into account its smaller size relative to international peers, we believe 8x FY16F P/E (20% discount to international peers’ average P/E) is justified for Samudera. Therefore, we recommend to BUY Samudera with a TP of S$0.36. Investors can take comfort that even at our TP price, this would only value Samudera at an attractive 0.55x FY15F P/B, still one of the lowest among its peers. Figure 20: Peer comparison Company

Mkt Cap (S$m)

P/E (x) (hist)

P/E (x) (fwd)

P/B (x)

0.28

148

5.5

6.1

0.4

BIG CAP CONTAINER SHIPPING - INTERNATIONAL AP Moeller-B MAERSKB DC 11,780.00 China Cosco-H 1919 HK 4.25 China Shipping-H 2866 HK 2.50 Nippon Yusen 9101 JP 339.00 Mitsui OSK Lines 9104 JP 385.00 Orient Overseas 316 HK 37.75 Kawasaki Kisen 9107 JP 286.00 Wan Hai Lines 2615 TT 26.25 Evergreen Marine 2603 TT 16.75 Neptune Orient NOL SP 0.90 Hyundai Merchant 011200 KS 7,190.00 Hanjin Shipping 117930 KS 5,420.00 Yang Ming Marine 2609 TT 11.55

50,068 16,168 13,358 6,345 5,112 4,113 2,957 2,542 2,543 2,328 1,760 1,593 1,512

14.2 96.0 21.8 12.1 10.9 11.2 10.0 8.7 13.2 16.3

8.2 28.4 16.0 9.3 8.8 6.5 8.5 9.7 11.2 55.3 9.8 11.7

1.0 1.4 0.9 0.7 0.6 0.7 0.6 1.5 0.9 1.0 2.0 1.4 1.0

14 1 4 6 6 6 6 19 7 (9) 13 (36) 7

4.5 29.4 8.6 15.7 9.7 6.1 7.7 11.3 15.2 60.6 10.9 14.2

21.2 106.4 60.3 88.1 117.9 63.0 11.4 90.9 225.7 505.2 664.5 164.0

2.5 2.4 1.8 2.2 1.7 7.6 0.6 -

SMALL-MID CAP CONTAINER SHIPPING - INTERNATIONAL AND SINGAPORE Naigai Trans Line 9384 JP 1,261.00 148 AIT Corp 9381 JP 1,162.00 253 First Ship Lease FSLT SP 0.17 112 Rickmers Maritime RMT SP 0.27 229

40.2 21.6 5.9 -

10.0 17.5 -

1.9 4.6 0.3

5 23 5 (2)

4.8 10.9 4.8

NC NC 100.5 73.8

1.6 2.6 12.0

Average (Excluding Samudera)

21.7

15.1

1.3

5

14.3

163.8

3.5

Samudera Shipping

Bloomberg Ticker SAMU SP

Price (Lcl curr)

ROE (%)

EV/EBITDA Net Dvd Yld (x) Gearing (%) (TTM) (%) 8 4.5 32.9 3.2

Source: Bloomberg, KGI Fraser

July 7, 2015

14 $ 141414

Samudera Shipping Line

Singapore

Key catalysts and risks Catalysts Improved supply/demand balance and industry rerating The depressed freight rates have been mainly caused by overcapacity in the industry. However, with sentiments at such depressing levels, any good news or signs that shows improvement in the supply-demand balance, such as a slowdown in new ship orders or increase in demolition of old vessels, may provide an uplift to freight rates. Improvement in global trade led by China A major factor that has put pressure on freight rates in recent months can be attributed to the decline in China’s external trade. Chinese exports unexpectedly fell 6.4% YoY in April, compared to a rise expected by consensus. The drop follows the 15% YoY drop in exports in March, which has prompted the Chinese government to cut interest rates. China has been the main driver of containership demand this decade and a recovery in its exports/imports in the next months may remove doubts over the health of China’s external trade. Risks Rise in bunker fuel prices Bunker fuel prices are closely linked to oil prices and makes up around 40 to 70% of operating costs for container ships. A drastic rise in bunker fuel prices will remove recent cost saving gains that shipping companies have been enjoying. Weakness in intra-Asian freight rates China accounts for close to 35% of the world’s containership volume growth since 2002, according to Clarkson Research Services. With China’s 1Q15 exports/imports lower by 10-15% YoY, the Shanghai Containerized Freight Index dropped around 20% in April. The weakness in the Shanghai Containerized Freight index may affect the freight rates of intra-Asian trade routes that Samudera operates in. Another potential negative factor is the movement of more and larger vessels into the intra-Asian routes that may depress freight rates. Increase in container shipping charter rates Samudera charters in 42% of its fleet thus exposing the group to an increase in charter rates. The group benefitted in FY14 on lower charter-in rates compared to 2010-2011 when charter rates were almost double for smaller container ships (~1,100 teu). Accidents that may cause disruptions to services In Jan-15, one of Samudera’s dry bulk carrier was involved in a collision with a tanker. The dry bulk carrier was out of service for more than a month. The repair and maintenance expenses related to the incident were covered by insurance with a minor deductible amount of US$100,000. We note that this incidents are rare and is not a major risk to the overall operations of the group.

July 7, 2015

15 $ 151515

Singapore

Samudera Shipping Line

Summary of Financials YE 31 Dec INCOME STATEMENT (US$m) Revenue Cos t of s a l es Gross Profit Other opera ti ng i ncome/(expens es ) Sel l i ng a nd di s tri buti on Admi n Profit from Operations Fi na nce i ncome/(expens es ) Sha re of JV res ul ts Excepti ona l s /Inves tment i ncome Profit before Tax Income ta x Non-control l i ng i nteres ts PATMI PATMI Norma l i zed

2013 391.2 (382.0) 9.2 7.4 (7.8) (6.7) 2.1 (3.4) 1.3 0.0 (0.0) (2.0) (0.1) (2.2) (2.2)

2014 364.2 (332.5) 31.7 3.1 (7.6) (6.1) 17.6 (2.4) 1.2 0.0 16.4 (1.9) (0.2) 14.3 14.3

2015F 368.5 (333.5) 35.0 0.0 (7.7) (6.3) 21.0 (2.2) 1.6 0.0 20.5 (2.4) (0.0) 18.1 18.1

2016F 403.4 (367.1) 36.3 0.0 (8.5) (6.9) 21.0 (1.5) 1.6 0.0 21.0 (2.5) (0.0) 18.6 18.6

2017F 442.2 (402.4) 39.8 0.0 (9.3) (7.5) 23.0 (1.1) 1.6 0.0 23.5 (2.7) (0.0) 20.7 20.7

BALANCE SHEET (US$m) Ca s h a nd ca s h equi va l ents Tra de a nd other recei va bl es Inventory Other current a s s ets Current Assets Property, pl a nt a nd equi pment Other non-current a s s ets Non-current Assets Total assets Tra de a nd other pa ya bl es Borrowi ngs (current) Other current l i a bi l i ti es Current Liabilities Borrowi ngs (non-current) Other non-current l i a bi l i ti es Non-current liabilities Sha rehol ders equi ty Non-control l i ng i nteres ts Total Equity Total Liabilities and Equity

2013 35.2 70.6 5.4 12.2 123.5 326.0 7.4 333.4 456.9 53.3 23.7 2.1 79.0 137.0 0.5 137.6 235.5 4.8 240.2 456.9

2014 52.3 58.4 4.0 8.9 123.7 305.8 8.1 313.9 437.5 41.4 23.9 4.1 69.4 112.4 0.1 112.5 250.7 4.9 255.6 437.5

2015F 48.5 59.1 4.0 8.9 120.5 296.3 6.9 303.2 423.7 41.6 19.3 4.4 65.3 91.0 0.1 91.1 262.4 4.9 267.3 423.7

2016F 35.6 64.7 4.4 8.9 113.6 287.5 7.1 294.6 408.2 45.7 19.1 4.0 68.8 59.8 0.1 59.9 274.6 4.9 279.6 408.2

2017F 38.4 71.0 4.8 8.9 123.1 276.2 7.3 283.5 406.5 50.1 18.8 4.2 73.2 39.3 0.1 39.4 289.0 4.9 293.9 406.5

CASH FLOW STATEMENT (US$m) Net i ncome before ta x Depreci a ti on & non ca s h a djus tments Cha nge i n Worki ng Ca pi ta l Income Ta x Pa i d Interes t Pa i d CF from operating activities Purcha s e/Di s pos a l of PPE Other CFI CF from investing activities Di vi dends Pa i d Debt Ra i s ed / (Repa i d) Equi ty Ra i s ed / (Bought Ba ck) Other Ca s h from Fi na nci ng CF from financing activities Net i ncrea s e i n ca s h & ca s h equi v. FX effects Begi nni ng Ca s h Ending Cash

2013 (0.0) 30.2 0.0 0.0 0.0 30.1 (5.9) 9.5 3.6 (1.1) (26.3) 0.0 5.4 (22.0) 11.5 (0.3) 16.4 35.2

2014 16.4 32.4 1.8 (1.5) (2.7) 46.6 (9.5) 4.2 (5.3) 0.0 (23.6) 0.0 0.7 (23.0) 18.3 (0.1) 27.9 52.3

2015F 20.5 33.9 (0.6) (2.1) (2.2) 49.6 (14.6) 0.0 (14.6) (12.7) (26.0) 0.0 0.0 (38.7) (3.8) (0.1) 46.1 48.5

2016F 21.0 27.8 (1.8) (2.9) (1.5) 42.6 (17.6) 0.0 (17.6) (6.4) (31.5) 0.0 0.0 (37.9) (13.0) (0.1) 42.3 35.6

2017F 23.5 30.0 (2.2) (2.5) (1.1) 47.6 (17.6) 0.0 (17.6) (6.4) (20.7) 0.0 0.0 (27.1) 2.8 (0.1) 29.4 38.4

July 7, 2015

16 $ 161616

Samudera Shipping Line

Singapore

Appendices Senior Management Masli Mulia Executive Chairman

As Executive Cha i rma n, Ma s l i Mul i a l ea ds the Boa rd i n the overa l l s tra tegi c di rection a nd bus i nes s growth of the Compa ny a nd i ts s ubs i di a ri es (the “Group”). He i s member of the Nomi na ting Commi ttee of the Compa ny. He i s a l s o the Pres i dent Di rector of PT. Sa mudera Indones i a Tbk (“Sa mudera Indones i a ”), a ma jori ty s ha rehol der of the Compa ny. Ma s l i Mul i a joi ned Sa mudera Indones i a i n 1971 a nd ha s hel d va ri ous pos i tions pri or to becomi ng the Pres i dent Di rector i n 2010. He s erves a s a member of the Advi s ory Boa rd i n the Indones i a n Na tiona l Shi powners ’ As s oci a tion (INSA). Formerl y, he wa s the Cha i rma n of ASEAN Federa tion of Forwa rders As s oci a tion a nd the Indones i a n Logi s tics a nd Frei ght Forwa rders As s oci a tion. Ma s l i Mul i a gra dua ted from the Mercha nt Ma ri ne Aca demy, Ja ka rta, Indones i a i n 1970.

Asmari Herry Prayitno Executive Director and CEO

As ma ri Herry, the Chi ef Executive Offi cer (“CEO”), i s res pons i bl e for the overa l l ma na gement, s tra tegi c pl a nni ng a nd da y-toda y bus i nes s opera tions of the Group. Pri or to hi s a ppoi ntment, he wa s the Chi ef Opera ting Offi cer res pons i bl e for the overa l l opera tions of the Group. As ma ri Herry joi ned Sa mudera Indones i a i n 1979 a nd ha s hel d va ri ous ma na geri a l pos i tions pri or to hi s a ppoi ntment a s Executive Di rector of the Compa ny i n 1997. He i s a l s o a Di rector of PT Sa mudera Indones i a Tbk s i nce 2010. As ma ri Herry wa s a ppoi nted a s the Deputy Cha i rma n of the Indones i a n Na tiona l Shi powners ’ As s oci a tion s i nce 2011. He gra dua ted from the Mercha nt Ma ri ne Col l ege i n Indones i a a nd joi ned the Sea Tra ns port Cours e a t AIM – Ma ni l a , Phi l i ppi nes .

Lim Kee Hee Executive Director, Commercial

Li m Kee Hee i s res pons i bl e for the overa l l commerci a l a ctivi ties of the Compa ny. Pri or to becomi ng Executive Di rector, Li m Kee Hee wa s the Seni or Genera l Ma na ger of the Compa ny who i s res pons i bl e for the tra de a nd ma rketing functions . He ha s over 20 yea rs of experi ence i n the s hi ppi ng i ndus try where he ha d s erved i n va ri ous s eni or ma na gement pos i tions pri or to joi ni ng the Compa ny. He hol ds a Ba chel or of Sci ence from the then Uni vers i ty of Si nga pore a nd a Gra dua te Di pl oma i n Fi na nci a l Ma na gement from the Si nga pore Ins titute of Ma na gement.

Hermawan Fridiana Herman Executive Director, Finance

Herma wa n wa s a ppoi nted a s the Executive Di rector, Fi na nce i n 2010. He i s res pons i bl e for the overa l l fi na nce a nd a dmi ni s tra tive functions of the Group. He joi ned Sa mudera Indones i a i n 1992 a s the Group Accountant a nd wa s s ubs equently pos ted to the Compa ny a s the Genera l Ma na ger for Fi na nce a nd Admi ni s tra tion pri or to hi s current a ppoi ntment. Herma wa n s tarted hi s ca reer wi th va ri ous bus i nes s cons ul tants i n Indones i a before joi ni ng KPMG Indones i a a s a n Audi tor i n 1989. He hol ds a Ba chel or of Economi cs degree (ma jori ng i n Accountancy) from the Uni vers i ty of Indones i a .

July 7, 2015

17 $ 171717

Singapore

Samudera Shipping Line

Appendices Vessels No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Name of vessel Northern Power Si na r Sa ba ng Si na r Sumba Si na r Suba ng Si na r Sa ngi r Ka nwa y Ga l a xy Ari s a ra Si na r Bi tung Vega Luna Si na r Bi ma Ita l i a n Expres s CTP Fortune Si nga pore Bri dge Si na r Buton Si na r Bra ni Si na r Sol o Si na r Ba ndung Si na r Bi nta n MCP Ams terda m MCP Vi l l a ch Bei Ha i Si na r Jepa ra Si na r Ji mba ra n Si na r Ambon Si na r Ja mbi Si na r Dema k Si na r Pa da ng Si na r Pa nja ng Tota l

Type Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng Conta i ner Shi ppi ng

Capacity Flag TEU Li beri a 4,586.0 Si nga pore 1,740.0 Si nga pore 1,740.0 Pa na ma 1,708.0 Pa na ma 1,708.0 Pa na ma 1,613.0 Ma rs ha l l Is l a nds 1,551.0 Pa na ma 1,150.0 Li bera 1,118.0 Si nga pore 1,118.0 Gi bra l ta r 1,084.0 Indones i a 1,064.0 Pa na ma 1,064.0 Pa na ma 1,060.0 Pa na ma 1,060.0 Si nga pore 1,060.0 Si nga pore 1,054.0 Si nga pore 1,054.0 Cyprus 618.0 Cyprus 618.0 Hong Kong 610.0 Indones i a 378.0 Indones i a 378.0 Indones i a 287.0 Indones i a 265.0 Indones i a 265.0 Indones i a 241.0 Indones i a 241.0 30,433.0

Year build 2010 2008 2008 2008 2008 1997 1992 2007 2006 2008 2012 1998 1998 2008 2010 1999 2004 2002 2007 2008 2006 2005 2005 2005 2005 2005 2005 2005

Control Cha rtered Owned Owned Cha rtered Cha rtered Cha rtered Cha rtered Cha rtered Cha rtered Owned Cha rtered Cha rtered Cha rtered Cha rtered Cha rtered Owned Owned Owned Cha rtered Cha rtered Cha rtered Owned Owned Owned Owned Owned Owned Owned

1 2

Oil Tanker Si na r Jogya Si na r Ema s

Oi l Ta nker Oi l Ta nker

Indones i a Indones i a

DWT 17,666.0 17,726.0

2001 2000

Owned Owned

3 4 5 6 7 8 9

Chemical Tanker Si na r Agra Si na r Bus a n Si na r Bonta ng Si na r La bua n Si na r Johor Si na r Bukom Si na r Tokyo

Chemi ca l Chemi ca l Chemi ca l Chemi ca l Chemi ca l Chemi ca l Chemi ca l

Indones i a Indones i a Indones i a Indones i a Indones i a Indones i a Si nga pore

DWT 11,244.0 106,000.0 3,785.0 3,519.0 3,098.0 3,097.0 2,949.0

2006 2006 1992 1994 1991 1990 2004

Owned Owned Owned Owned Owned Owned Owned

10 11

Gas Tanker LNG Ta ngguh Towuti Ga s Ta nker Ama na h Ga s Ta nker

Si nga pore Indones i a

CBM 145,700.0 1,560.0

2007 1981

Owned-25% s ta ke Owned

12 13 14 15 16

Marine Offshore Support unit LCT SMS Ta ngguh Offs hore LCT SMS Ta ngguh Offs hore Aqua ti c Cons erver Offs hore Si na r Ha ndi l Offs hore Nurhi da ya h Offs hore

Support Ves s elIndones i a Support Ves s elIndones i a Support Ves s elIndones i a Support Ves s elIndones i a Support Ves s elIndones i a

DWT 1,374.0 450.0 400.0 350.0 102.0

2006 2007 1995 2013 1996

Cha rtered Cha rtered Owned Cha rtered Cha rtered

17 18

Dry Bulk Si na r Ka pua s Si na r Kuta i

DWT 57,700.0 57,000.0

2011 2011

Owned Owned

Ta nker Ta nker Ta nker Ta nker Ta nker Ta nker Ta nker

Dry Bul k Ca rri er Dry Bul k Ca rri er

Si nga pore Si nga pore

Source: Company, KGI Fraser

July 7, 2015

18 $ 181818

Singapore

Samudera Shipping Line

Appendices Samudera’s end to end services of container, bulk and offshore tankers Samudera provides customers with efficient and reliable services of moving container or bulk cargo across the region. Its container shipping runs out of the Singapore hub to regional ports. Its bulk carrier and tanker services are chartered out based on time charter. Its other complementary business including its logistic network consists of inland transport, warehousing, container depots and third party logistics. Samudera operates four container terminals in Indonesia. Samudera Shipping

Samudera Logistics

Samudera Terminal

Samudera Agency



    

   

    

 

International Container Shipping Domestic Container Shipping Bulk Carrier, Offshore & Tanker

Inland Transport Warehouse Container Depot Third Party logistics Project logistics

Container terminal Multipurpose terminal Domestic International

General agents Sub agents Marketing Agents Protecting Agents Local Agents

Source: Company

July 7, 2015

19 $ 191919

Singapore

Samudera Shipping Line

Appendices Service network (as at 1 March 2015) Region Southeast Asia

Indian subcontinent

Far East

Country Indonesia Malaysia Thailand Vietnam Myanmar Cambodia Philippines India Bangladesh Sri Lanka Pakistan Korea China Taiwan Hong Kong

Service 5 services Jakarta, Surabaya, Semarang, Belawan and Palembang Port Klang Bangkok and Songkhla Ho Chi Minh and North Vietnam Yangon Sihanoukville Manila Calcutta, Nhava Sheva, Pipavav, Madras Chittagong Colombo Karachi Incheon and Busan Shanghai, Qingdao, Ningbo, Xiamen Taiwan Hong Kong

Sailing frequencies 1-5/week 1-4/week 1-4/week 1-4/week 1-4/week 1-4/week 1-4/week 1-3/week 1-3/week 1-3/week 1-3/week 1/week 1/week 1/week 1/week

Source: Company, KGI Fraser

July 7, 2015

20 $ 202020

Singapore

Samudera Shipping Line

Appendices Peer comparison Company

CONTAINER SHIPPING AP Moeller-B China Cosco-H China Shipping-H Nippon Yusen Mitsui OSK Lines Orient Overseas Kawasaki Kisen Wan Hai Lines Evergreen Marine Neptune Orient Hyundai Merchant Hanjin Shipping Yang Ming Marine SIMPLE AVERAGE DRY BULK China Cosco -H China Shipping D Nippon Yusen Mitsui OSK Lines Cosco Shipping-A Kawasaki Kisen Hyundai Merchant Hanjin Shipping D/S Norden Pacific Basin Pan Ocean Co Korea Line Corp Dryships Inc Scorpio Bulkers Navios Maritime SIMPLE AVERAGE TANKER MISC Bhd China Shipping D National Shipping Nippon Yusen Mitsui OSK Lines Teekay Corp Qatar Gas Transp Euronav Sa Hyundai Merchant Stolt-Nielsen Tsakos Energy SIMPLE AVERAGE

Bloomberg Ticker

Price (Lcl curr)

Mkt Cap (S$m)

P/E (x) (hist)

P/E (x) (fwd)

P/B (x) (MRQ)

ROE (%)

EV/EBITDA (x) (TTM)

Net Grng (%)

Dvd Yld (%)

MAERSKB DC 1919 HK 2866 HK 9101 JP 9104 JP 316 HK 9107 JP 2615 TT 2603 TT NOL SP 011200 KS 117930 KS 2609 TT

11780.00 4.25 2.50 339.00 385.00 37.75 286.00 26.25 16.75 0.90 7190.00 5420.00 11.55

50068 16168 13358 6345 5112 4113 2957 2542 2543 2328 1760 1593 1512

14.2 96.0 21.8 12.1 10.9 11.2 10.0 8.7 13.2 16.3 22.0

8.2 28.4 16.0 9.3 8.8 6.5 8.5 9.7 11.2 55.3 9.8 11.7 11.8

1.0 1.4 0.9 0.7 0.6 0.7 0.6 1.5 0.9 1.0 2.0 1.4 1.0 0.9

14 1 4 6 6 6 6 19 7 (9) 13 (36) 7 8

4.5 29.4 8.6 15.7 9.7 6.1 7.7 11.3 15.2 60.6 10.9 14.2 11.6

21.2 106.4 60.3 88.1 117.9 63.0 11.4 90.9 225.7 505.2 664.5 164.0 69.9

2.5 2.4 1.8 2.2 1.7 7.6 0.6 2.7

1919 HK 1138 HK 9101 JP 9104 JP 600428 CH 9107 JP 011200 KS 117930 KS DNORD DC 2343 HK 028670 KS 005880 KS DRYS US SALT US NM US

4.25 5.06 339.00 385.00 10.84 286.00 7190.00 5420.00 170.40 2.41 3000.00 21300.00 0.59 1.68 3.64

16168 6792 6345 5112 3984 2957 1760 1593 1438 817 822 623 538 711 513

96.0 44.6 12.1 10.9 39.4 10.0 0.6 7.2 6.7 30.5

28.4 11.3 9.3 8.8 67.8 8.5 9.8 37.8 28.3 8.3 5.6 23.3

1.4 0.6 0.7 0.6 2.7 0.6 2.0 1.4 0.9 0.6 0.5 1.1 0.1 0.3 0.3 1.1

1 1 6 6 7 6 13 (36) (25) (25) 101 16 (2) (14) (8) 5

16.4 8.6 15.7 6.1 60.6 10.9 31.8 5.2 6.7 6.0 10.6 19.4

106.4 123.4 88.1 117.9 76.4 63.0 505.2 664.5 0.7 86.1 135.0 125.7 5.7 125.2 183.2

0.7 2.4 1.8 0.2 1.7 2.1 6.6 1.5

MISC MK 1138 HK NSCSA AB 9101 JP 9104 JP TK US QGTS QD EURN BB 011200 KS SNI NO TNP US

7.90 5.06 53.25 339.00 385.00 44.12 22.07 13.78 7190.00 137.50 9.47

12492 6792 7546 6345 5112 4302 4581 3274 1760 1476 1083

16.0 44.6 26.0 12.1 10.9 13.5 8.3 16.3 21.7

15.4 11.3 18.8 9.3 8.8 32.5 12.0 11.4 7.1 6.0 15.7

1.2 0.6 2.6 0.7 0.6 3.0 4.2 1.4 2.0 0.7 0.7 1.7

8 1 11 6 6 (6) 28 (4) 13 7 4 7

14.4 16.4 16.0 8.6 15.7 14.2 14.0 17.3 60.6 6.8 9.4 27.4

15.6 123.4 83.5 88.1 117.9 193.2 684.0 113.8 505.2 125.9 99.5 200.0

0.8 0.7 1.9 2.4 1.8 5.0 5.4 1.6 5.4 2.5 2.4

Source: Company, KGI Fraser

July 7, 2015

21 $ 212121

Singapore

Samudera Shipping Line

Appendices Peer performance Current Price (Lcl Currency) SINGAPORE PLAYERS SAMUDERA SHIP FIRST SHIP LEASE RICKMERS MARITIM SINGAPORE SHIPPING CONTAINER SHIPPING AP Moeller-B China Cosco-H China Shipping-H Nippon Yusen Mitsui OSK Lines Orient Overseas Kawasaki Kisen Wan Hai Lines Evergreen Marine Neptune Orient Hyundai Merchant Hanjin Shipping Yang Ming Marine SIMPLE AVERAGE DRY BULK China Cosco -H China Shipping D Nippon Yusen Mitsui OSK Lines Cosco Shipping-A Kawasaki Kisen Hyundai Merchant Hanjin Shipping D/S Norden Pacific Basin Pan Ocean Co Korea Line Corp Dryships Inc Scorpio Bulkers Navios Maritime SIMPLE AVERAGE

Price change (%) - 6 months

Price change (%) - 1 year

0.28 0.17 0.27 0.34

20.15 68.93 -7.02 19.64

98.84 93.33 -10.17 36.73

11780.00 4.25 2.50 339.00 385.00 37.75 286.00 26.25 16.75 0.90 7190.00 5420.00 11.55

10.17 3.66 -1.19 1.19 8.76 -16.67 -8.63 -7.08 -24.55 7.19 -29.19 -6.39 -30.63 -3.81

-4.90 35.35 22.55 12.25 -0.77 -4.67 31.19 71.57 1.52 -5.79 -18.12 -10.12 -4.94 18.23

4.25 5.06 339.00 385.00 10.84 286.00 7190.00 5420.00 170.40 2.41 3000.00 21300.00 0.59 1.68 3.64

3.66 -9.80 1.19 8.76

35.35 6.08 12.25 -0.77

-8.63 -29.19 -6.39 27.64 -26.30 13.21 -6.37 -43.02 -13.85 -10.12 0.88

31.19 -18.12 -10.12 -12.84 -50.10 -5.06 -6.99 -81.71 -81.42 -63.31 21.70

Source: Bloomberg, KGI Fraser

July 7, 2015

22 $ 222222

Samudera Shipping Line

KGI’s Ratings

Disclaimer

Singapore

Rating

Definition KGI Fraser Research’s recommendations are based on an Absolute Return rating system.

BUY

>10% total return over the next 12 months

HOLD

-10% to +10% total return over the next 12 months

SELL

<-10% total return over the next 12 months

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July 7, 2015

$