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 Capital Markets

ZIM Integrated Shipping Services / Equity Capital Markets

<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/182/154/original/BANNER-ECM.png?1610481722" class="editor-image img-responsive" data-smartkarma-image-id="182154"></figure>
</section>
<p>Israel's ZIM Integrated Shipping Services (proposed ticker ZIM US) has filed documents to launch an IPO in the US. Media reports have speculated the container shipping company hopes to raise at least US$100 mn in the deal; some reports say ZIM could try to raise US$300 mn or more.</p>
<p>The objective of this note is to provide some context for the company and the global container shipping industry. After all, it has been over two decades since a global container ship operator has traded in the US (<a href="https://www.smartkarma.com/entities/matson-inc" target="_blank" data-smartkarma-citation="entities:6335:1" rel="noopener">Matson Inc (MATX US)</a> focuses on niche domestic US markets, generally).</p>
<p>ZIM is a small player in global container shipping, and contrary to its claims the company mainly operates in highly competitive segments. Its "asset-light" model is unusual, but it represents a double-edged sword: chartering in the majority of its capacity offers flexibility, but it also means operating costs may rise in tandem with freight rates over the cycle, limiting margin expansion. </p>
<p>Fortunately, Europe and Asia offer several direct comps for ZIM, including <a href="https://www.smartkarma.com/entities/ap-moeller-maersk-a-s" target="_blank" data-smartkarma-citation="entities:22428:1" rel="noopener">AP Moeller - Maersk A/S (MAERSKB DC)</a> of Denmark and <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a> of Taiwan. These two companies -- both of them far larger than ZIM, and more profitable over the cycle -- will serve as useful benchmarks once ZIM and its bankers announce details regarding deal size and pricing. </p>




Israel's ZIM Integrated Shipping Services (proposed ticker ZIM US) has filed documents to launch an IPO in the US. Media reports have speculated the container shipping company hopes to raise at least US$100 mn in the deal; some reports say ZIM could try to raise US$300 mn or more.
The objective of this note is to provide some context for the company and the global container shipping industry. After all, it has been over two decades since a global container ship operator has traded in the US (Matson Inc (MATX US) focuses on niche domestic US markets, generally).
ZIM is a small player in global container shipping, and contrary to its claims the company mainly operates in highly competitive segments. Its "asset-light" model is unusual, but it represents a double-edged sword: chartering in the majority of its capacity offers flexibility, but it also means operating costs may rise in tandem with freight rates over the cycle, limiting margin expansion. 
Fortunately, Europe and Asia offer several direct comps for ZIM, including AP Moeller - Maersk A/S (MAERSKB DC) of Denmark and Evergreen Marine Corp (2603 TT) of Taiwan. These two companies -- both of them far larger than ZIM, and more profitable over the cycle -- will serve as useful benchmarks once ZIM and its bankers announce details regarding deal size and pricing. 

Planned ZIM IPO: Opportunistic Listing Near Cycle Peak for Minor Industry Player

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/ind-comm-bk-of-china-h" target="_blank" data-smartkarma-citation="entities:1119:1" rel="noopener">ICBC (H) (1398 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mobile-ltd" target="_blank" data-smartkarma-citation="entities:27:1" rel="noopener">China Mobile (941 HK)</a>, <a href="https://www.smartkarma.com/entities/cnooc-ltd" target="_blank" data-smartkarma-citation="entities:175:1" rel="noopener">CNOOC Ltd (883 HK)</a> and <a href="https://www.smartkarma.com/entities/byd-co-ltd-h" target="_blank" data-smartkarma-citation="entities:20962:1" rel="noopener">BYD (1211 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a>, <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (HK) (9618 HK)</a>. Shorts increased on Communication Services, Energy and Consumer Staples, and decreased on Information Technology, Financials and Consumer Discretionary.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/change-inc" target="_blank" data-smartkarma-citation="entities:27414:1" rel="noopener">Change Inc (3962 JP)</a>, <a href="https://www.smartkarma.com/entities/advantest-corp" target="_blank" data-smartkarma-citation="entities:18107:1" rel="noopener">Advantest Corp (6857 JP)</a>, <a href="https://www.smartkarma.com/entities/renova-inc" target="_blank" data-smartkarma-citation="entities:26753:1" rel="noopener">RENOVA Inc (9519 JP)</a> and <a href="https://www.smartkarma.com/entities/shimamura-co-ltd" target="_blank" data-smartkarma-citation="entities:15213:1" rel="noopener">Shimamura (8227 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/honda-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:154:1" rel="noopener">Honda Motor (7267 JP)</a>, <a href="https://www.smartkarma.com/entities/kao-corp" target="_blank" data-smartkarma-citation="entities:12933:1" rel="noopener">Kao Corp (4452 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a> and <a href="https://www.smartkarma.com/entities/bridgestone-corp" target="_blank" data-smartkarma-citation="entities:8914:1" rel="noopener">Bridgestone Corp (5108 JP)</a>. Sectorally, shorts increased on Utilities and Communication Services, while decreasing on Consumer Discretionary, Consumer Staples, Information Technology and Industrials.</p></div><div><p>In Korea, there were short positions put on in <a href="https://www.smartkarma.com/entities/kt-corp" target="_blank" data-smartkarma-citation="entities:1112:1" rel="noopener">KT Corp (030200 KS)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-uplus-corp" target="_blank" data-smartkarma-citation="entities:1113:1" rel="noopener">LG Uplus Corp (032640 KS)</a> and <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/largan-precision-co-ltd" target="_blank" data-smartkarma-citation="entities:9126:1" rel="noopener">Largan Precision (3008 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a> and <a href="https://www.smartkarma.com/entities/asustek-computer-inc" target="_blank" data-smartkarma-citation="entities:13002:1" rel="noopener">Asustek Computer (2357 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" data-smartkarma-citation="entities:11084:1" rel="noopener">Walsin Technology (2492 TT)</a>, <a href="https://www.smartkarma.com/entities/richwave-technology-corp" target="_blank" data-smartkarma-citation="entities:18629:1" rel="noopener">Richwave Technology (4968 TT)</a> and <a href="https://www.smartkarma.com/entities/pan-jit-international-inc" target="_blank" data-smartkarma-citation="entities:12501:1" rel="noopener">Pan Jit International (2481 TT)</a>. </p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on ICBC (H) (1398 HK), China Mobile (941 HK), CNOOC Ltd (883 HK) and BYD (1211 HK) while there was short covering on Xiaomi Corp (1810 HK), Xinyi Solar Holdings (968 HK), HKEX (388 HK) and JD.com (HK) (9618 HK). Shorts increased on Communication Services, Energy and Consumer Staples, and decreased on Information Technology, Financials and Consumer Discretionary.In Japan, stocks that saw the most shorts were Change Inc (3962 JP), Advantest Corp (6857 JP), RENOVA Inc (9519 JP) and Shimamura (8227 JP) while shorts decreased on Honda Motor (7267 JP), Kao Corp (4452 JP), Canon Inc (7751 JP) and Bridgestone Corp (5108 JP). Sectorally, shorts increased on Utilities and Communication Services, while decreasing on Consumer Discretionary, Consumer Staples, Information Technology and Industrials.In Korea, there were short positions put on in KT Corp (030200 KS), Samsung Electronics (005930 KS), LG Uplus Corp (032640 KS) and Kakao Corp (035720 KS). Stocks in Taiwan that saw the highest increase in shorts were TSMC (2330 TT), Largan Precision (3008 TT), Pegatron Corp (4938 TT) and Asustek Computer (2357 TT) while shorts were covered on Evergreen Marine Corp (2603 TT), Walsin Technology (2492 TT), Richwave Technology (4968 TT) and Pan Jit International (2481 TT). 

Asia Short Interest: China Mobile, CNOOC, Xiaomi, JD, Change, KT, Samsung, TSMC, Largan

Equity Bottom-Up

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/678/original/BANNER-TTOtherDec20_GreyOrange.png?1608575984" class="editor-image img-responsive" data-smartkarma-image-id="179678"></figure></section><p>We launched this product about a month ago, promising to revisit our suggested pair trades every month or so. Returns on our three pair trade ideas since December 4? Not good, not good at all!</p><p>If we consider only four of the six names that make up our three suggested pair trades, the portfolio returned a measly +0.2% between December 4 and January 6 (not including costs of trading). However, the two positions that moved <em>hard</em> against us -- which in reality we probably would have been forced to exit due to stop-loss orders -- resulted in a <em>big</em> loss for the portfolio. </p><p>What happened? Unfortunately, we stepped in front of a surge in momentum in two small-cap names, one on the Long side and one one the Short side. We still believe longer-term trends favor these positions, but in the near-term,  price action simply overwhelmed our investment theses. </p><p>Despite the substantial paper losses, we're sticking to our guns and keeping the portfolio as-is. We'll be back in a month or so with another update, hopefully with better returns to report.</p>

We launched this product about a month ago, promising to revisit our suggested pair trades every month or so. Returns on our three pair trade ideas since December 4? Not good, not good at all!If we consider only four of the six names that make up our three suggested pair trades, the portfolio returned a measly +0.2% between December 4 and January 6 (not including costs of trading). However, the two positions that moved hard against us -- which in reality we probably would have been forced to exit due to stop-loss orders -- resulted in a big loss for the portfolio. What happened? Unfortunately, we stepped in front of a surge in momentum in two small-cap names, one on the Long side and one one the Short side. We still believe longer-term trends favor these positions, but in the near-term,  price action simply overwhelmed our investment theses. Despite the substantial paper losses, we're sticking to our guns and keeping the portfolio as-is. We'll be back in a month or so with another update, hopefully with better returns to report.

TRACKING TRAFFIC/Pair Trades Update: 'Want to See a Dead Body?' (January 7 2021)

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/180/980/original/BANNER-BoxDec20.png?1609781008" class="editor-image img-responsive" data-smartkarma-image-id="180980"></figure></section><p>Within container shipping space, recent share price performance suggests investors believe the benefits of the cyclical upturn will mainly accrue to carriers like <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>.</p><p>To maintain a positive view on container carriers in the near- and medium-term, investors must embrace several key assumptions regarding demand, supply, and fuel prices. We lay out five of these key assumptions and the risks associated with them. </p><p>We conclude that investors may not fully appreciate all the risks facing the sector in early 2021. </p>

Within container shipping space, recent share price performance suggests investors believe the benefits of the cyclical upturn will mainly accrue to carriers like Evergreen Marine Corp (2603 TT).To maintain a positive view on container carriers in the near- and medium-term, investors must embrace several key assumptions regarding demand, supply, and fuel prices. We lay out five of these key assumptions and the risks associated with them. We conclude that investors may not fully appreciate all the risks facing the sector in early 2021. 

The Shaky Assumptions Behind Recent Strong Performance of Asian Container Carriers

Alibaba Group Holding  / Equity Capital Markets

<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/549/original/BANNER-TTOtherDec20_GreyOrange.png?1608442683" class="editor-image img-responsive" data-smartkarma-image-id="179549"></figure>
</section>
<p>In the first section of this note we review key themes of the last year within our regular coverage, which includes regional Logistics, Transportation, and Travel. We also measure year to date performance of some of the individual stocks we've closely tracked in 2020. </p>
<p>The second section of this note is a list of themes and ideas we expect to drive share price performance in Asian Logistics, Transportation, and Travel over the next 12 months. It concludes with some suggested 2021 Long / Short pair trade ideas in each of these three segments. </p>
<p>The third and final section of this note highlights several potential high-profile IPOs in the broader Asian Logistics space. Most of these potential deals are linked to large, well-known Chinese eCommerce fulfillment and "mobility" companies. </p>




In the first section of this note we review key themes of the last year within our regular coverage, which includes regional Logistics, Transportation, and Travel. We also measure year to date performance of some of the individual stocks we've closely tracked in 2020. 
The second section of this note is a list of themes and ideas we expect to drive share price performance in Asian Logistics, Transportation, and Travel over the next 12 months. It concludes with some suggested 2021 Long / Short pair trade ideas in each of these three segments. 
The third and final section of this note highlights several potential high-profile IPOs in the broader Asian Logistics space. Most of these potential deals are linked to large, well-known Chinese eCommerce fulfillment and "mobility" companies. 

TRACKING TRAFFIC/ 2020 Review | 2021 Preview | Potential IPOs in Logistics, Transportation & Travel

Taiwan

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Evergreen Marine Corp (2603 TT)

Planned ZIM IPO: Opportunistic Listing Near Cycle Peak for Minor Industry Player

ZIM is pursuing an IPO in the US as the container shipping cycle is approaching a peak. In this note we attempt to give investors context that...

Tracking Traffic

Asia Short Interest: China Mobile, CNOOC, Xiaomi, JD, Change, KT, Samsung, TSMC, Largan

The weekly short interest report looks at large moves across HK, Japan, Korea and Taiwan stocks and helps in determining market interest that could...

Brian Freitas

TRACKING TRAFFIC/Pair Trades Update: 'Want to See a Dead Body?' (January 7 2021)

One month in, our three suggested pair trades have generated returns ranging from "meh" to "You're fired!" In this note we take a look at what went...

Tracking Traffic

The Shaky Assumptions Behind Recent Strong Performance of Asian Container Carriers

Container carriers have performed very well since mid-2020, and we concede we underestimated the strength of spot rates in recent weeks. But...

Tracking Traffic

TRACKING TRAFFIC/ 2020 Review | 2021 Preview | Potential IPOs in Logistics, Transportation & Travel

In this year-end piece we review key themes of 2020, look forward to emerging trends of 2021, and highlight some exciting companies that could...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)