$SYSCORP / 5173 (SHIN YANG SHIPPING CORPORATION BERHAD) / SYGROUP - Another Marine Logistics Company Finally Experiencing Tailwinds after a long down cycle.

By now, I hope everyone should be familiar with the sort of dynamics of the marine logistics industry from all the discussions we've already had. Another company I had been reading about recently is Shin Yang Group, who shares some overlaps with $HARBOUR / 2062 (HARBOUR-LINK GROUP BERHAD).

This is written by terence775 purely for education purpose only, and you should do your due diligence before making any investment decisions.

Briefly, their business segments are:

1) Shipping Segment, which includes container haulage and dry and liquid bulk shipping which operate in SEA as well as internationally including East Asia, and Far East regions.

2) Ship building and repair, which as the name implies, is involved in newbuilds as well as repairs, modifications, etc. of ships. To this end they have 3 shipbuilding yards in Miri, Bintulu, and Kuala Baram. They also have floating dock facilities for more niche, specialized repairs.

3) Land Logistics and transportation, warehousing, especially with their newly acquired subsidiary Mewah Exim.

4) Gas division via their acquisition of Piasau Gas, which is involved in the manufacturing and distribution of industrial gases including air separation,

Items 1, 2 and 3 are their core business, which accounts for the bulk of their revenue. Piasau gas was acquired in 2022 if I remember correctly, and while small, seems to be contributing well considering the price they paid for it.

I think the company is now in an interesting position as they are experiencing tailwinds in all their segments and could start to report improving numbers in the coming months. So far, it seems like the market is unawares yet.

-The shipping catalyst have been discussed in depth already for a long time. You can read back on the HARBOUR stream to read all the back and forth over the past year or more. A nice update is that SYGROUP says the cargo volumes have stabilized with higher exports from Samalaju and KKIP. (This can tie in to pmetal, pmbtech, and omh as well)

-The ship building segment had been in a doldrums for years, but is recently making a comeback. This industry update was initially highlighted by @RHBTradeSmartMY 's report on $TAS / 5149 (TAS OFFSHORE BERHAD) and subsequently @Ryunanda had highlighted it again. Recently, there is Petronas's new phase of capex spending, which aims to have more newbuilds of OSVs to replace their old ones-- this is expected to start end of the year, which aims to construct 100 vessels over 4 years. Apparently, each OSV is estimated to cost between RM 70-100mil (According to Dato Richard), depending on the scope and complexity, so you can do the maths. Other companies in this space also include $SEALINK / 5145 (SEALINK INTERNATIONAL BERHAD) , however as always the extent of who benefits as well as the risk involved in each must be studied by yourselves further.

- Ship repair segment is also seeing good demand again, with their floating Docks in Miri hitting 100% utilizations and the others are around 70%. As per the AGM, the management explained that their shipbuilding has around RM 175mil outstanding contract value, while the ship repair contract has RM 89mil outstanding contract value over the next 2 years, whilst they are in negotiation and discussions with potential customers from the O&G and resources sectors.

- Land logistics is also picking up along with the Sarawak economy (did I mention SYGROUP is mainly based in Sarawak as well?). And I think the management had good foresight for the acquisition of majority stake in Mewah Exim around middle of 2023, which mainly operates in Johor.

- Industrial gases should also continue to remain resilient, and is affected by the industrial activity so more activity = more business and vice versa.

I attach a few excerpts from news, media, and other documents which make my up sources on this.

Some risks I can think of:
- As with most logistics companies, their business follows along with economic activity.
- Geopolitical tensions could negatively impact them.
- Somehow, their shipping segment had still declined last qtr, even though Harbour's had already rebounded. I am still trying to understand why.
- General execution risk which is relatively higher for marine sectors.

Good luck!