I asked a veteran with 30 plus years experience in large scale shipping~ albeit iron ore ~ to run the ruler over WLD and give his opinion. This is his opinion and I now pass on his thoughts for open discussion.
First, let's start with the bad.
Wld have 4 main weaknesses:
1. Wld claim to be vertically integrated, but they are not. While Wld can cash in on its quarantine bases, so it is semi~vertical, he couldn't find a single cow on the balance sheet. In short, Wld are a price taker in the market, and as we are seeing now the results in times of inflated prices has been ongoing losses.
2. To make serious profits in shipping the ship needs to be busy on both trips. With purpose built ships, it would be difficult for Wld to make any money on the return route.
3. Its main customer, Indonesia, and its future desired customer, China, are "difficult" to do business with, and this makes Wld a price taker here too.
4. Public image of live cattle trade in Australia is a mess; N.Z. has already given up.
Wld may not be able to address these weak points, so as a price taker at both ends and with a bad public image, this makes this stock's future in God's hands so to speak.
Now, the good.
What did interest him, however, was a key industry insider, Heytesbury, wanting on the register and, more recently, Gina's interest in doubling the size of the live cattle market by opening up China.
Gina, especially, can resolve at least 3 and maybe all 4 of these issues. Gina has the cattle, she has political clout both in Australia and China, and she has the media on-side. And, most importantly, she needs ships~big ones and lots of them, to execute her master plan of 800k a year. Wld have by far the biggest fleet and the most animal "friendly", and a new ship designed for China currently being built. Oh, and don't we all know, it's a bargain.
The math adds up.
Incidentally, today we finally see the bots crank it up, so someone wants these shares even cheaper.
Food for thought.
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