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

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

APMM has rallied close to 20% since the lows touched in early February as risk assets and oil complex rallied. We are sellers into the rally as the underlying fundamentals for mainstay container shipping has continued to deteriorate through the quarter. Spot rates are quoting virtually at a nadir and our channel checks suggest that contract rates have been signed at significantly lower levels than last year, severally undermining any prospects for Maersk line to return to profitability anytime soon. Operationally, Maersk line’s 4Q15 losses show that earnings have not only plateaued due to depressed freight rates, but also because cost optimisation (driven by low bunker prices) has outlived its utility. The path to profitability by cost cutting as a driver have seemingly run its course. With anaemic top line growth, challenges to profitability will only exacerbate. Basis of our bearish view on APMM is driven by Maersk Line losses ahead.

APMM has rallied close to 20% since the lows touched in early February as risk assets and oil complex rallied. We are sellers into the rally as the underlying fundamentals for mainstay container shipping has continued to deteriorate through the quarter. Spot rates are quoting virtually at a nadir and our channel checks suggest that contract rates have been signed at significantly lower levels than last year, severally undermining any prospects for Maersk line to return to profitability anytime soon. Operationally, Maersk line’s 4Q15 losses show that earnings have not only plateaued due to depressed freight rates, but also because cost optimisation (driven by low bunker prices) has outlived its utility. The path to profitability by cost cutting as a driver have seemingly run its course. With anaemic top line growth, challenges to profitability will only exacerbate. Basis of our bearish view on APMM is driven by Maersk Line losses ahead.

A.P. Møller - Mærsk A/S (MAERSKB DC) - Why We Are Turning Sellers of APMM?

Transport Sector, China and Asia-focused Research

Charles De Trenck

Thematic (Sector/Industry)

My updates back in December to reiterate the negative in containers (and bulk) and anticipated a weak 2016, to be sure. But in recent weeks it appears the market has gotten even weaker. I am sure our friends from Drewry have experienced this as well. A few key details below on rates that have gone even further south than 2009.In recent weeks we understand from friends that some markets in Intra-Asia have gone into negative pricing.This means that lines have to try to recoup some of their losses…

My updates back in December to reiterate the negative in containers (and bulk) and anticipated a weak 2016, to be sure. But in recent weeks it appears the market has gotten even weaker. I am sure our friends from Drewry have experienced this as well. A few key details below on rates that have gone even further south than 2009.In recent weeks we understand from friends that some markets in Intra-Asia have gone into negative pricing.This means that lines have to try to recoup some of their losses…

Container Shipping Industry Last Few Weeks Factoring in Doomsday

Consolidation in the Liner Industry Container shipping companies confront the enormous challenges facing the industry today. One of the options available to lines is consolidation; this is essential for the industry but fraught with difficulty for the lines involved. We at Drewry have prepared a thought leadership paper which looks at the industry context, historical M&amp;A activity, and the benefits and risks to participants and proposes some must dos for successful liner consolidation.

Consolidation in the Liner Industry Container shipping companies confront the enormous challenges facing the industry today. One of the options available to lines is consolidation; this is essential for the industry but fraught with difficulty for the lines involved. We at Drewry have prepared a thought leadership paper which looks at the industry context, historical M&amp;A activity, and the benefits and risks to participants and proposes some must dos for successful liner consolidation. 

AP MOELLER-MAERSK A/S-B (MAERSKB DC) - Diversification and Balance Sheet Provides Strong Cushion<img src="https://static-prod.smartkarma.com/images/media/000/005/417/original/APMM.JPG?1454552530" class="editor-image img-responsive" data-smartkarma-image-id="5417">• Fair Value under pressure amid sombre market outlook: We have our fair value of APMM at DKK 9,700 with a  Neutral rating. We have updated our forecasts to factor in management’s subdued guidance and new lows in oil prices. This results in lower group net profit as we assume a negative impact on three main businesses – Liner, Oil and Terminal. We forecast APMM’s net income to be in the range of USD…

AP MOELLER-MAERSK A/S-B (MAERSKB DC) - Diversification and Balance Sheet Provides Strong Cushion• Fair Value under pressure amid sombre market outlook: We have our fair value of APMM at DKK 9,700 with a  Neutral rating. We have updated our forecasts to factor in management’s subdued guidance and new lows in oil prices. This results in lower group net profit as we assume a negative impact on three main businesses – Liner, Oil and Terminal. We forecast APMM’s net income to be in the range of USD…

AP MOELLER-MAERSK A/S-B (MAERSKB DC) - Diversification and Balance Sheet Provides Strong Cushion

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.

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AP Moller - Maersk A/S (MAERSKA DC)

A.P. Møller - Mærsk A/S (MAERSKB DC) - Why We Are Turning Sellers of APMM?

APMM has rallied close to 20% since the lows touched in early February as risk assets and oil complex rallied. We are sellers into the rally as the...

Drewry Maritime Financial Research

Container Shipping Industry Last Few Weeks Factoring in Doomsday

My updates back in December to reiterate the negative in containers (and bulk) and anticipated a weak 2016, to be sure. But in recent weeks it...

Charles De Trenck

Consolidation in the Liner Industry

Consolidation in the Liner Industry Container shipping companies confront the enormous challenges facing the industry today. One of the options...

Drewry Maritime Financial Research

AP MOELLER-MAERSK A/S-B (MAERSKB DC) - Diversification and Balance Sheet Provides Strong Cushion

AP MOELLER-MAERSK A/S-B (MAERSKB DC) - Diversification and Balance Sheet Provides Strong Cushion• Fair Value under pressure amid sombre market...

Drewry Maritime Financial Research

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