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

<ul>
<li>
Yes, carrier margins and returns in Q2/H1 plunged dramatically compared to 2022</li>
<li>
Yes, carrier margins and returns in Q2/H1 were quite good by historical standards</li>
<li>In this insight we provide context to help readers evaluate carrier performance in 2023</li>
</ul>



Yes, carrier margins and returns in Q2/H1 plunged dramatically compared to 2022

Yes, carrier margins and returns in Q2/H1 were quite good by historical standards
In this insight we provide context to help readers evaluate carrier performance in 2023


Evergreen Marine: 'H1 Earnings Plunged Dramatically Y/Y' | Also, 'H1 Earnings Were Pretty Damn Good'

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Cross Asset Strategy

<ul>
<li>Sri Lanka defaulted on its debt for the first time in its history.</li>
<li>South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies entering Sri Lanka are Korean companies.</li>
<li>Other emerging/frontier market countries including Turkey, Pakistan, South Africa, Russia, Ukraine, Belarus, El Salvador, Lebanon, Ethiopia, Ghana, Kenya, Egypt, Tunisia and Peru also face potential debt defaults. </li>
</ul>


Sri Lanka defaulted on its debt for the first time in its history.
South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies entering Sri Lanka are Korean companies.
Other emerging/frontier market countries including Turkey, Pakistan, South Africa, Russia, Ukraine, Belarus, El Salvador, Lebanon, Ethiopia, Ghana, Kenya, Egypt, Tunisia and Peru also face potential debt defaults. 


Sri Lanka Defaults on Debt: South Korea Is the Biggest Investor & Domino Effect on Other Countries?

<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>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>.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.

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

On the afternoon of Friday, March 23rd, <a href="https://www.smartkarma.com/entities/15428" target="_blank" data-smartkarma-citation="entities:15428:1">Evergreen Marine Corp Ltd (2603 TT)</a> reported FY17 preliminary results, which show the company made Operating and Net losses in Q417. After several consecutive quarters of steady improvements in core profitability, we were surprised to see the company post a significant Operating loss in the December quarter -- and we believe we are far more pessimistic on the container sector cycle than many observers, having turned negative on the sector several months…

On the afternoon of Friday, March 23rd, Evergreen Marine Corp Ltd (2603 TT) reported FY17 preliminary results, which show the company made Operating and Net losses in Q417. After several consecutive quarters of steady improvements in core profitability, we were surprised to see the company post a significant Operating loss in the December quarter -- and we believe we are far more pessimistic on the container sector cycle than many observers, having turned negative on the sector several months…

'Trade War' Chatter & A Surprise Q4 Loss: Time to Revisit Long CAL/Short Evergreen Pair Trade

We began to turn cautious on container shipping last Summer and became more negative as Summer turned to Fall. Our view was that average freight rates and carrier profitability had improved sharply in the months following <a href="https://www.smartkarma.com/entities/18689" target="_blank" data-smartkarma-citation="entities:18689:1">Hanjin Shipping Co Ltd (117930 KS)</a>'s August 2016 bankruptcy, and that further fundamental improvements would be much harder to come by. About six months after turning cautious on container shipping, we remain negative on the sector, and we believe 2018 will turn out to be worse…

We began to turn cautious on container shipping last Summer and became more negative as Summer turned to Fall. Our view was that average freight rates and carrier profitability had improved sharply in the months following Hanjin Shipping Co Ltd (117930 KS)'s August 2016 bankruptcy, and that further fundamental improvements would be much harder to come by. About six months after turning cautious on container shipping, we remain negative on the sector, and we believe 2018 will turn out to be worse…

Container Shipping Sector: Six Months of Declining Share Prices Explained in Three Charts

South Korea

Hanjin Shipping Co., Ltd. provides marine transportation service.  The Company commands different types of vessels including container vessels, liquefied natural gas (LNG) carriers, bulk carriers, and oil tankers.  In addition, Hanjin Shipping leases ships, and commercial buildings.

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Hanjin Shipping (117930 KS)

Evergreen Marine: 'H1 Earnings Plunged Dramatically Y/Y' | Also, 'H1 Earnings Were Pretty Damn Good'

Evergreen, Maersk, and ZIM have all reported H1 results. Yes, margins and returns were a fraction of what they were in 2021-22, but H123 earnings...

Tracking Traffic

Sri Lanka Defaults on Debt: South Korea Is the Biggest Investor & Domino Effect on Other Countries?

Sri Lanka defaulted on its debt for the first time in its history. South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies...

Douglas Kim

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

'Trade War' Chatter & A Surprise Q4 Loss: Time to Revisit Long CAL/Short Evergreen Pair Trade

On the afternoon of Friday, March 23rd, Evergreen Marine Corp Ltd (2603 TT) reported FY17 preliminary results, which show the company made...

Daniel Hellberg

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Evergreen Marine: 'H1 Earnings Plunged Dramatically Y/Y' | Also, 'H1 Earnings Were Pretty Damn Good'

Evergreen, Maersk, and ZIM have all reported H1 results. Yes, margins and returns were a fraction of what they were in 2021-22, but H123 earnings...

Tracking Traffic

Sri Lanka Defaults on Debt: South Korea Is the Biggest Investor & Domino Effect on Other Countries?

Sri Lanka defaulted on its debt for the first time in its history. South Korea is the biggest investor in Sri Lanka. About 20% of foreign companies...

Douglas Kim

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

'Trade War' Chatter & A Surprise Q4 Loss: Time to Revisit Long CAL/Short Evergreen Pair Trade

On the afternoon of Friday, March 23rd, Evergreen Marine Corp Ltd (2603 TT) reported FY17 preliminary results, which show the company made...

Daniel Hellberg

Container Shipping Sector: Six Months of Declining Share Prices Explained in Three Charts

We began to turn cautious on container shipping last Summer and became more negative as Summer turned to Fall. Our view was that average freight...

Daniel Hellberg