Flexibility in vessel deployment. A regional container shipping company, Samudera focuses on providing feeder services, which suggests that it could be more insulated from the slowdown in demand for containerships, as there is some degree of flexibility in the deployment of short-haul feeder routes.

Continuous capacity expansion lifting ceiling for earnings growth. Management expects the demand for short-haul intra-Asia container shipping services to remain healthy. The bright spot in the negative broader container shipping market is that rates and volume are still holding up for short-haul intra-Asia routes, as there is still no problem of over-capacity for smaller vessels operating in this segment.

Speedy response to contain costs. For its inter-island container shipping business in Indonesia, the group has reduced capacity in a loss-making service and terminated another loss-making service in the last one year. These responses, together with an improved business environment for inter-island container shipping, should significantly increase group profitability in FY08.

PRICE/TARGET PRICE S$0.13/S$0.20