Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

AP Moeller - Maersk A/S / Equity Bottom-Up

<ul>
<li>December was best reading from our momentum tracker since November 2022</li>
<li>Improvement driven by rising spot rates, new fees, and stronger volume growth</li>
<li>Even before Red Sea / Suez capacity squeeze, conditions were bottoming</li>
</ul>


December was best reading from our momentum tracker since November 2022
Improvement driven by rising spot rates, new fees, and stronger volume growth
Even before Red Sea / Suez capacity squeeze, conditions were bottoming


Monthly Container Shipping Tracker | Rate Momentum +ive | Throughput Up, Too | (January 2024)

<ul>
<li>Container shipping giant Maersk met Q3 expectations and maintained earlier FY23 guidance</li>
<li>However, downbeat commentary combined with capex and job cuts sent shares -17% lower</li>
<li>Maersk does not expect any recovery in '24, but we believe this pessimism already in prices</li>
</ul>


Container shipping giant Maersk met Q3 expectations and maintained earlier FY23 guidance
However, downbeat commentary combined with capex and job cuts sent shares -17% lower
Maersk does not expect any recovery in '24, but we believe this pessimism already in prices


Maersk Q3: Estimates Met, Guidance Kept | But Downbeat Assessment of Market Sends Shares Down -17%

Equity Capital Markets

<ul>
<li>So far in 2023 TS Lines has sold off close to one quarter of its shipping capacity</li>
<li>In the company's core market, Intra-Asia, it appears rates have bottomed out here in Q323</li>
<li>We also review Q2 financial results from TS Lines' main comp, Wan Hai Lines (WHL)</li>
</ul>


So far in 2023 TS Lines has sold off close to one quarter of its shipping capacity
In the company's core market, Intra-Asia, it appears rates have bottomed out here in Q323
We also review Q2 financial results from TS Lines' main comp, Wan Hai Lines (WHL)


TS Lines Pre-IPO | Slimming Down Fleet | Intra-Asia Market Update | Latest From Key Comp Wan Hai

<ul>
<li>In terms of fleet characteristics, market exposure, and recent financial performance, we believe <a href="https://www.smartkarma.com/entities/t-s-lines" target="_blank" data-smartkarma-citation="entities:39795:1" rel="noopener">T.S. Lines (TSL HK)</a> and Taiwan's <a href="https://www.smartkarma.com/entities/wan-hai-lines-ltd" target="_blank" data-smartkarma-citation="entities:14262:1" rel="noopener">Wan Hai Lines (2615 TT)</a> are directly comparable</li>
<li>WHL has more exposure to the Transpacific, but still boasts a much larger Intra-Asia operation owing to its scale advantage (fleet and revenue about four times the size of TSL)</li>
<li>Given the similarities we outline in this insight, we believe TSL's shares should trade at EV/Fleet and EV/Revenue multiples in line with WHL's; no premium is justified, in our view</li>
</ul>


In terms of fleet characteristics, market exposure, and recent financial performance, we believe T.S. Lines (TSL HK) and Taiwan's Wan Hai Lines (2615 TT) are directly comparable
WHL has more exposure to the Transpacific, but still boasts a much larger Intra-Asia operation owing to its scale advantage (fleet and revenue about four times the size of TSL)
Given the similarities we outline in this insight, we believe TSL's shares should trade at EV/Fleet and EV/Revenue multiples in line with WHL's; no premium is justified, in our view


TS Lines Pre-IPO | Like Wan Hai Lines, but Smaller | Intra-Asia Update | Approaches to Valuation

<ul>
<li>Our monthly index suggests that container rates have bottomed, with easier comps in H2</li>
<li>Lower fuel has been a tailwind for carriers for several months, but that could change</li>
<li>We still think the worst has passed for carriers, a few of which have performed well in '23</li>
</ul>


Our monthly index suggests that container rates have bottomed, with easier comps in H2
Lower fuel has been a tailwind for carriers for several months, but that could change
We still think the worst has passed for carriers, a few of which have performed well in '23


Monthly Container Shipping Tracker | Rates Bottoming | Fuel Tailwind Easing? | (August 2023)

Denmark

A.P. Moller - Maersk A/S operates as an integrated transport and logistics company. The Company offers container vessels, supply ships, special vessels, terminals, tug boat activities and reefer container box manufacturing. A.P. Moller-Maersk serves clients worldwide.

D/S Norden A/S is an international shipping company.  The Company operates a fleet of modern bulk vessels and tankers consisting of company owned vessels and long-term and short-term chartered cargo ships.  D/S Norden transports commodities such as coal, fertilizer, grain, sugar, and steels, as well as crude oil and other liquids.  The Company operates worldwide.

DFDS A/S provides passenger and freight shipping services, and offers shipping related logistics solutions.  The Company focuses on two business divisions: DFDS Tor Line operates roro liner traffic in the North Sea, and DFDS Seaways runs overnight cruise ferries between cities in Northern Europe.  DFDS sells to customers with large shipping requirements and to car traveling tourists.

DSV A/S is the parent company for a group of companies that offer transport and logistics.   The Group provides truck, ship, and plane transport services, as well as warehousing and logistic services.  DSV operates in Europe, North America, and the Far East.

DSV A/S provides transport and logistics services. The Company offers road, marine, and air transport services, as well as warehousing, purchase order management, and other logistic solutions. DSV serves customers worldwide.

Kobenhavns Lufthavne A/S (Copenhagen Airports A/S - CPH) owns and operates Kastrup, the international airport in Copenhagen, and Roskilde airport.  The Company provides traffic management, maintenance, and security services, as well as manages the Airport Shopping Center and airport projects.  Kobenhavns Lufthavne also has investments in airports in Mexico, England, and China.

Vestas Wind Systems A/S develops, manufactures, and markets wind turbines that generate electricity. The Company installs and maintenance turbines. Vestas Wind Systems serves customers worldwide.

Rockwool International A/S develops and produces stone wool, a fiber made from melted volcanic rock, and stone-wool-based products such as insulation and fire protection and noise and vibration control products.  The Company's products line also includes acoustic ceilings, facade panels, and horticultural substrates.  Rockwool produces in several countries and sells worldwide.

ISS A/S provides cleaning, office support, property, catering, and integrated facility services. The Company offers security, facility management, change management, space management, and consulting services.

COSCO SHIPPING Holdings Co., Ltd offers marine freight transportation services.  The Company offers container shipping, dry bulk shipping, logistics services, freight forwarding, and terminal and container leasing services internationally.  COSCO SHIPPING Holdings Co., Ltd operates container ships and terminals, and manufactures shipping containers.

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.

Kawasaki Kisen Kaisha, Ltd. operates marine cargo and passenger transportation around the world.  The Company provides ocean liner, bulk carrier, car carrier, unscheduled specialized carrier, and energy transportation services. The Company also offers insurance, warehousing, and land transportation services.  Items transported include automobile, grain, petroleum, coal, iron ore, and wood chip.

Nippon Yusen Kabushiki Kaisha mainly provides marine transportation services and transportation management solution from international hub ports to both domestic and international ports. The Company operates container transportation, tramp and specialized carriers, and logistics and cruise lines. Nippon Yusen offers scheduled and unscheduled transportation services around the world.

HMM Co., Ltd. provides marine transportation services.  The Company commands different types of vessels including full container vessels, oil tankers, car carriers, LNG carriers, bulk carriers, and tramps.

Evergreen Marine Corp. (Taiwan) Ltd. transports freight by ships. The Company operates container ships to move freight throughout the world. Evergreen Marine has interests in terminals, airline operations and motor freight transportation, as well as container manufacturing.

Mitsui O.S.K. Lines, Ltd. provides marine transportation, warehousing, and cargo handling services.  The Company operates container ship, specialized carrier, oil tankers, and ferry.  Items transported include coal, iron ore, grain, logs, aluminum, cement, industrial salt, copper ore, wood chips, paper products, chemical products, gasoline and other petroleum products, LPG, and other cargoes.

Kuehne + Nagel International AG transports freight worldwide.  The Company operates sea, land, and rail freight transportation businesses and warehousing and distribution facilities.  Kuehne + Nagel also provides related special services.

COSCO SHIPPING Energy Transportation Co., Ltd. offers marine shipping services. The Company provides refined oil transportation, crude oil transportation, and other services. COSCO SHIPPING Energy Transportation also ships iron ores, dry bulks, coal, and other products.

Cosco Shipping Energy Transportation Co. Ltd. (H) (1138 HK)

Cosco Shipping Energy Transportation Co. Ltd. (H)

Kirby Corporation operates a fleet of inland tank barges.  The Company transports industrial chemicals, refined petroleum products, black oil products, and agricultural chemicals.  Kirby also overhauls and services diesel engines employed in marine, power generation, and rail applications.

A.P. Moeller-Maersk A/S is a conglomerate with diversified holdings. The Company operates a fleet including container vessels, tankers, supply ships, special vessels, APM terminials, and oil drilling rigs.  A.P. Moeller-Maersk also operates industrial business and explores for and produces oil and gas. The Company is active worldwide.

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AP Moeller - Maersk A/S (MAERSKB DC)

Monthly Container Shipping Tracker | Rate Momentum +ive | Throughput Up, Too | (January 2024)

Price momentum for deep-sea container rates is improving, and container volumes are also firming. Meanwhile, cheap fuel remains a slightly helpful...

Tracking Traffic

Maersk Q3: Estimates Met, Guidance Kept | But Downbeat Assessment of Market Sends Shares Down -17%

Last Friday Maersk reported Q3 results that met expectations. The company maintained FY23 guidance, but announced surprising cash-conservation...

Tracking Traffic

TS Lines Pre-IPO | Slimming Down Fleet | Intra-Asia Market Update | Latest From Key Comp Wan Hai

Intra-Asia container carrier TS Lines filed to list its shares in Hong Kong (again) at the end of May, and its filing included full-year 2023...

Tracking Traffic

TS Lines Pre-IPO | Like Wan Hai Lines, but Smaller | Intra-Asia Update | Approaches to Valuation

Intra-Asia container carrier TS Lines filed to list its shares in Hong Kong (again) at the end of May, and its filing included full-year 2023...

Tracking Traffic

Monthly Container Shipping Tracker | Rates Bottoming | Fuel Tailwind Easing? | (August 2023)

Our analysis shows pricing momentum for carriers remains depressed, but stable. In other words, conditions are not deteriorating. But fuel prices...

Tracking Traffic

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