Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Maritime Sector, Equity & Credit Research

Drewry Maritime Financial Research

With no ties to other players in the shipping, finance or banking world, we provide a uniquely impartial view of the markets and companies we cover. Our parent organization, Drewry is a leading independent provider of research services to the maritime and shipping industry, employing over 100 professionals across an international network of offices in London, Delhi, Singapore and Shanghai. Combining our market-leading resources with seasoned sector expertise DFRS offers a highly differentiated and comprehensive range of investment and financial research services to lenders and prospective investors in publicly listed maritime and shipping companies. The full service of reports, supporting resources and sector orientated webinars provides our clients with the most complete picture of the organisations under coverage as is possible. We have been charting and analysing the world’s maritime markets for more than 40 years. This unrivalled intelligence and understanding provides the foundation of our research service. Our analysts have access to one of the most up-to-date, comprehensive and reliable sources of market insight and research data available today. We look at globally listed companies within the following sectors: Port Operators, Container Shipping, Container Manufacturing & Leasing, LNG Shipping, Dry Bulk Shipping and Tanker Shipping. Combine in-depth sector expertise with financial analysis focusing on over 50 stocks globally.

Equity Bottom-Up

Orient Overseas International / Equity Bottom-Up

We downgrade our rating for OOIL to Neutral. Our new fair value of HKD 32 is close to the current trading price of HKD 31.50 with a P/B of 0.5x. The company has been our preferred player in the container shipping sector and can still deliver better earnings than its peers supported by its effective management. However, we are concerned that the slowing economic growth in China and macroeconomic uncertainties are likely to prolong weakness in container freight rates. Based on below par 1Q16 performance, we are sceptical if OOIL will be able to outperform its peers this year given the current industry downturn. We, therefore, revise our rating for OOIL to Neutral.

We downgrade our rating for OOIL to Neutral. Our new fair value of HKD 32 is close to the current trading price of HKD 31.50 with a P/B of 0.5x. The company has been our preferred player in the container shipping sector and can still deliver better earnings than its peers supported by its effective management. However, we are concerned that the slowing economic growth in China and macroeconomic uncertainties are likely to prolong weakness in container freight rates. Based on below par 1Q16 performance, we are sceptical if OOIL will be able to outperform its peers this year given the current industry downturn. We, therefore, revise our rating for OOIL to Neutral.

Orient Overseas International Ltd (316 HK) - 1Q16 Operational Data Update; Downgrade to Neutral

Transport Sector, China and Asia-focused Research

Charles De Trenck

<a href="https://www.smartkarma.com/entities/801" target="_blank" data-smartkarma-citation="entities:801">Orient Overseas Intl Ltd</a> Our friends at Drewry are listed in the press as having downgraded OOIL from Buy to Hold. I still think you have been too kind. OOIL is a great company with strong assets and balance sheet. But as I have mentioned many times. OOIL has been over-broked and the darling of too many investors and analysts. In the interests of fairness and good disclosure, may I recommend Drewry post new notes at the same time as to all posts through other media, and at least at same time as…

Orient Overseas Intl Ltd Our friends at Drewry are listed in the press as having downgraded OOIL from Buy to Hold. I still think you have been too kind. OOIL is a great company with strong assets and balance sheet. But as I have mentioned many times. OOIL has been over-broked and the darling of too many investors and analysts. In the interests of fairness and good disclosure, may I recommend Drewry post new notes at the same time as to all posts through other media, and at least at same time as…

Orient Overseas...and the Current Mess in Containers...and Other Issues

COSCO Shipping Holdings / Equity Bottom-Up

As more updates come out on the new merged company, new alliance re-jigging rumors are following along as well. And COSCO-CS <a href="https://www.smartkarma.com/entities/286" target="_blank" data-smartkarma-citation="entities:286">China Cosco Holdings H</a>  seems to have come up with a brilliant stratagem, if it pans out. It does not involve cuts in staff (as of now the company has said it will not cut staff). It does not involve – though this will come soon enough – discussions on reconfigured services, or other big announcements as of yet. What we have from the shipping press is talk of a new…

As more updates come out on the new merged company, new alliance re-jigging rumors are following along as well. And COSCO-CS China Cosco Holdings H  seems to have come up with a brilliant stratagem, if it pans out. It does not involve cuts in staff (as of now the company has said it will not cut staff). It does not involve – though this will come soon enough – discussions on reconfigured services, or other big announcements as of yet. What we have from the shipping press is talk of a new…

COSCO's (COSCO-CS) Brilliant Plan to Blow up Part of the Competition

Thematic (Sector/Industry)

Reasonable port valuation supports M&amp;A activities<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/443/original/ports5.JPG?1454570524" class="editor-image img-responsive" data-smartkarma-image-id="5443"></figure>Note: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/444/original/ports6.JPG?1454570793" class="editor-image img-responsive" data-smartkarma-image-id="5444"></figure> Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Reasonable port valuation supports M&amp;A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Global Port Operators - Reasonable Valuation Supports M&A Activities

Intensifying concerns about China as it registered its slowest growth since 1990 set the tone for a roller-coaster ride in 2016. The largest emerging country expanded 6.9%y/y in 2015, prompting the IMF to slash its global growth forecast for the third time in less than a year. Drewry Port Index fell 14% in the first three weeks of trading. The divergence between MSCI World and Drewry Port Index is the greatest since January 2015, pointing to a value buy for the port index compared with a year ago.

Intensifying concerns about China as it registered its slowest growth since 1990 set the tone for a roller-coaster ride in 2016. The largest emerging country expanded 6.9%y/y in 2015, prompting the IMF to slash its global growth forecast for the third time in less than a year. Drewry Port Index fell 14% in the first three weeks of trading. The divergence between MSCI World and Drewry Port Index is the greatest since January 2015, pointing to a value buy for the port index compared with a year ago.

Port Operators 2016 - Sieve Out Value Companies Amid Slowing Trade Growth

Hong Kong

Orient Overseas International Ltd, through its subsidiaries, owns and leases ships, operates terminals, and provides freight forwarding and container transportation services.  The Company also develops and invests in properties, leases equipment, and invests in securities.

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Orient Overseas International (316 HK)

Orient Overseas International Ltd (316 HK) - 1Q16 Operational Data Update; Downgrade to Neutral

We downgrade our rating for OOIL to Neutral. Our new fair value of HKD 32 is close to the current trading price of HKD 31.50 with a P/B of 0.5x....

Drewry Maritime Financial Research

Orient Overseas...and the Current Mess in Containers...and Other Issues

Orient Overseas Intl Ltd Our friends at Drewry are listed in the press as having downgraded OOIL from Buy to Hold. I still think you have been too...

Charles De Trenck

COSCO's (COSCO-CS) Brilliant Plan to Blow up Part of the Competition

As more updates come out on the new merged company, new alliance re-jigging rumors are following along as well. And COSCO-CS China Cosco Holdings...

Charles De Trenck

Global Port Operators - Reasonable Valuation Supports M&A Activities

Reasonable port valuation supports M&A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0xSource:...

Drewry Maritime Financial Research

Port Operators 2016 - Sieve Out Value Companies Amid Slowing Trade Growth

Intensifying concerns about China as it registered its slowest growth since 1990 set the tone for a roller-coaster ride in 2016. The largest...

Drewry Maritime Financial Research

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