Transport Sector, China and Asia-focused Research

Charles De Trenck

Thematic (Sector/Industry)

McKinsey has put out a seminal paper on container shipping, the next 50 years. I attach the link because the file is so large. It is worth reading. It may actually be a bit scary too  –  if they or others think they are right. McKinsey has been a 2-edged sword for the industry. Listening to them one might think their impact has been only positive. And they have done quite a lot of good at times (APL-OOCL mid-90s). But they have also done a lot of overpaid work that has had less than positive…

McKinsey has put out a seminal paper on container shipping, the next 50 years. I attach the link because the file is so large. It is worth reading. It may actually be a bit scary too  –  if they or others think they are right. McKinsey has been a 2-edged sword for the industry. Listening to them one might think their impact has been only positive. And they have done quite a lot of good at times (APL-OOCL mid-90s). But they have also done a lot of overpaid work that has had less than positive…

Another Revolution Is Coming for Container Shipping (& Ports)

Lead Analyst, Credit Research, Drewry Maritime Financial Research

Konstantinos Oikonomopoulos

Lead Analyst, Credit Research

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.

Credit

Profitability shot up in 2Q17, thanks to a better freight market and benefits from NOL acquisition: CMA CGM posted higher revenues by 57% y/y at the end of the second quarter at USD 5.5bn, which translates into USD 19bn annualised (USD  15.9bn at end FY16). The group benefitted from a 33% surge y/y (4.7 mteu) in transported volumes  (NOL's contribution, along with launch of Ocean Alliance) and improved freight rates. CMA CGM achieved a price of USD 1,134 per teu (container shipping revenues only…

Profitability shot up in 2Q17, thanks to a better freight market and benefits from NOL acquisition: CMA CGM posted higher revenues by 57% y/y at the end of the second quarter at USD 5.5bn, which translates into USD 19bn annualised (USD  15.9bn at end FY16). The group benefitted from a 33% surge y/y (4.7 mteu) in transported volumes  (NOL's contribution, along with launch of Ocean Alliance) and improved freight rates. CMA CGM achieved a price of USD 1,134 per teu (container shipping revenues only…

CMA CGM Credit Research 2Q17 Results Update - Credit Outlook Stable - Bond Valuation Neutral

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

Supply-demand balance still delicate, but better than last two years. The balance between supply and demand is still wafer-thin, which has had its impact, despite the peak season being underway. Our latest numbers suggest that the peak season freight rate growth is expected to be moderate this year. On the Asia-Europe trade, the late summer lull in shipments was a headwind, while the Transpacific still suffers the overhang of excess supply. In addition, massive factory closure in China…

Supply-demand balance still delicate, but better than last two years. The balance between supply and demand is still wafer-thin, which has had its impact, despite the peak season being underway. Our latest numbers suggest that the peak season freight rate growth is expected to be moderate this year. On the Asia-Europe trade, the late summer lull in shipments was a headwind, while the Transpacific still suffers the overhang of excess supply. In addition, massive factory closure in China…

Container Shipping - A Rising Tide Floats All Boats

Equity Bottom-Up

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

Impairments hold back group’s result, but Maersk Line turns profitable. Maersk Line returned back to the black with a profit of USD 339m in 2Q17 from a loss of USD 151m in 2Q16. The company’s turnaround was achieved mainly on account of a 22% increase in the freight rates. Unit costs though proved to be a slight dampener which rose 7% on the back of higher bunker fuel prices (+61% y/y to USD 313 / tonne). The turnaround of Maersk Line is largely in line with DMFR’s estimate and we believe this…

Impairments hold back group’s result, but Maersk Line turns profitable. Maersk Line returned back to the black with a profit of USD 339m in 2Q17 from a loss of USD 151m in 2Q16. The company’s turnaround was achieved mainly on account of a 22% increase in the freight rates. Unit costs though proved to be a slight dampener which rose 7% on the back of higher bunker fuel prices (+61% y/y to USD 313 / tonne). The turnaround of Maersk Line is largely in line with DMFR’s estimate and we believe this…

Underlying Thesis Intact; Maersk Line Returns to Profitability

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

<h2>Overview</h2>Since <a href="https://www.smartkarma.com/entities/18689" target="_blank" data-smartkarma-citation="entities:18689:1">Hanjin Shipping Co Ltd (117930 KS)</a> declared bankruptcy at the end of August 2016, market conditions in long-haul container shipping have improved substantially. The removal of Hanjin's capacity (and it's aggressive pricing tactics) combined with a modest improvement in demand led to a strong improvement in freight rates in most long-haul markets since the end of Q3 last year. In addition, a series of recent mergers and acquisitions in the sector, plus new carrier alliances that…

OverviewSince Hanjin Shipping Co Ltd (117930 KS) declared bankruptcy at the end of August 2016, market conditions in long-haul container shipping have improved substantially. The removal of Hanjin's capacity (and it's aggressive pricing tactics) combined with a modest improvement in demand led to a strong improvement in freight rates in most long-haul markets since the end of Q3 last year. In addition, a series of recent mergers and acquisitions in the sector, plus new carrier alliances that…

Evergreen, Yang Ming Q217 Results Show Sharp Recovery Since Hanjin Bankruptcy in Q316; Now What?

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)

Another Revolution Is Coming for Container Shipping (& Ports)

McKinsey has put out a seminal paper on container shipping, the next 50 years. I attach the link because the file is so large. It is worth reading....

Charles De Trenck

CMA CGM Credit Research 2Q17 Results Update - Credit Outlook Stable - Bond Valuation Neutral

Profitability shot up in 2Q17, thanks to a better freight market and benefits from NOL acquisition: CMA CGM posted higher revenues by 57% y/y at...

Drewry Maritime Financial Research

Container Shipping - A Rising Tide Floats All Boats

Supply-demand balance still delicate, but better than last two years. The balance between supply and demand is still wafer-thin, which has had its...

Drewry Maritime Financial Research

Underlying Thesis Intact; Maersk Line Returns to Profitability

Impairments hold back group’s result, but Maersk Line turns profitable. Maersk Line returned back to the black with a profit of USD 339m in 2Q17...

Drewry Maritime Financial Research

Evergreen, Yang Ming Q217 Results Show Sharp Recovery Since Hanjin Bankruptcy in Q316; Now What?

OverviewSince Hanjin Shipping Co Ltd (117930 KS) declared bankruptcy at the end of August 2016, market conditions in long-haul container shipping...

Daniel Hellberg

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