Equity Analyst, LightStream Research

Nuzran Sahib

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

The three Japanese shipping majors - NYK, MOL and KKK, all saw their share prices fall following the release of their full-year earnings for FY03/18 on 27th April. MOL’s share price declined 5.4% and K-Line’s and NYK’s share prices dropped 4.2% and 0.9% respectively. All three companies beat their respective company guidance and the average consensus at the top-line but earnings were weak.  We will be having a closer look at the substantial restructuring losses recorded by MOL and other two…

The three Japanese shipping majors - NYK, MOL and KKK, all saw their share prices fall following the release of their full-year earnings for FY03/18 on 27th April. MOL’s share price declined 5.4% and K-Line’s and NYK’s share prices dropped 4.2% and 0.9% respectively. All three companies beat their respective company guidance and the average consensus at the top-line but earnings were weak.  We will be having a closer look at the substantial restructuring losses recorded by MOL and other two…

Market Wary of the Restructuring Cost Despite Outperforming Revenue

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

At the lunch break on Friday, April 27th, the three major Japanese shipping lines all reported March 2018 fiscal year financial results, including segment profits for their respective container operations (which merged on April 1st). The three Japanese carriers all reported losses for their container operations in the seasonally slow March quarter, and these losses were in aggregate greater than the quarterly losses they reported a year earlier. <figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/050/925/original/JP_margins.png?1525006966" class="editor-image img-responsive" data-smartkarma-image-id="50925"></figure><div class="content-caption">Sources: companies</div>March quarter aggregate segment…

At the lunch break on Friday, April 27th, the three major Japanese shipping lines all reported March 2018 fiscal year financial results, including segment profits for their respective container operations (which merged on April 1st). The three Japanese carriers all reported losses for their container operations in the seasonally slow March quarter, and these losses were in aggregate greater than the quarterly losses they reported a year earlier. Sources: companiesMarch quarter aggregate segment…

Momentum No More: Japan3 Shipping Lines Report Worsening Container Segment Losses in FYQ4

Thematic (Sector/Industry)

The Baltic Dry Index (BDI) which factors in rates for Capesize, Panamax and Supramax vessels is showing a slightly different seasonal trend compared to the last few years. China’s demand for iron ore is being moderated by slow exports of steel following the Trump tariffs and this could affect the freight rates for Capesizes and Panamaxes resulting in a drop in dry bulk revenues for the shipping companies.<ul><li>Trump tax, winter slows demand for iron-ore shipping during 4Q post-LNY where usually rates recover.</li><li>Revenue from dry bulk segments for NYK, MOL and K-Line should be lower than expected for the 4Q FY03/18 on the back of falling BDI beyond LNY.</li><li>Surging demand for iron ore from China has almost peaked and industry specialists forecast stable demand during the next few years.</li><li>But, the second-hand market value for dry bulk ships indicates, positive outlook on the industry.</li></ul>

The Baltic Dry Index (BDI) which factors in rates for Capesize, Panamax and Supramax vessels is showing a slightly different seasonal trend compared to the last few years. China’s demand for iron ore is being moderated by slow exports of steel following the Trump tariffs and this could affect the freight rates for Capesizes and Panamaxes resulting in a drop in dry bulk revenues for the shipping companies.Trump tax, winter slows demand for iron-ore shipping during 4Q post-LNY where usually rates recover.Revenue from dry bulk segments for NYK, MOL and K-Line should be lower than expected for the 4Q FY03/18 on the back of falling BDI beyond LNY.Surging demand for iron ore from China has almost peaked and industry specialists forecast stable demand during the next few years.But, the second-hand market value for dry bulk ships indicates, positive outlook on the industry.

Unseasonal Downtrend to Hurt Bulk Shipping in 4QFY18

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

Strong profitability thanks to an improved market, NOL's contribution and Ocean Alliance network efficiencies  Record revenues in FY17: Top line surged by 32% y/y at the end of the year at USD 21bn of which USD 5.9bn were contributed by NOL. On a stand-alone basis and in order to compare accurately performance (NOL consolidation since June 2016), CMA CGM’s sales grew by circa 14% on FY17 revenue of USD 15.2bn vs USD 13.4bn a year before. The consolidated group benefitted from a 21% surge y/y…

Strong profitability thanks to an improved market, NOL's contribution and Ocean Alliance network efficiencies  Record revenues in FY17: Top line surged by 32% y/y at the end of the year at USD 21bn of which USD 5.9bn were contributed by NOL. On a stand-alone basis and in order to compare accurately performance (NOL consolidation since June 2016), CMA CGM’s sales grew by circa 14% on FY17 revenue of USD 15.2bn vs USD 13.4bn a year before. The consolidated group benefitted from a 21% surge y/y…

Container Shipping - Can CMA CGMs Bonds Withstand the Selling Pressure from the Broader Bond Market?

<ul><li>ONE soon to become the 5th largest containership company in the world, passing Hapag Lloyd</li><li>Containership industry consolidation should lead to more control over the supply and the rates</li><li>Synergies from integrated operations of ONE drive earnings of the three companies</li><li>Competition should intensify during the negotiation phase between ONE and its existing clients where competitors try to cash-in</li><li>Freight Rates should be more stable on the back of increasing international trades</li></ul>In battling the tight market conditions with low freight rates on the back of the introduction of ultra large container vessels which lead to a significant increase in supply, the container shipping industry has been going through a consolidation phase. We are about to witness the last possible significant merger when NYK, MOL and K-Line start operating their container shipping segment under the JV named Ocean Network Express (ONE). Profits and losses will be accounted for by the companies under the share of profits from the JV where NYK will account for 38% while MOL and K-Line will account for 31% each.

ONE soon to become the 5th largest containership company in the world, passing Hapag LloydContainership industry consolidation should lead to more control over the supply and the ratesSynergies from integrated operations of ONE drive earnings of the three companiesCompetition should intensify during the negotiation phase between ONE and its existing clients where competitors try to cash-inFreight Rates should be more stable on the back of increasing international tradesIn battling the tight market conditions with low freight rates on the back of the introduction of ultra large container vessels which lead to a significant increase in supply, the container shipping industry has been going through a consolidation phase. We are about to witness the last possible significant merger when NYK, MOL and K-Line start operating their container shipping segment under the JV named Ocean Network Express (ONE). Profits and losses will be accounted for by the companies under the share of profits from the JV where NYK will account for 38% while MOL and K-Line will account for 31% each.

Ocean Network Express Aims to Generate Massive Operational Synergies and Change Fortunes for 3J

Japan

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.

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Mitsui O.S.K. Lines (9104 JP)

Market Wary of the Restructuring Cost Despite Outperforming Revenue

The three Japanese shipping majors - NYK, MOL and KKK, all saw their share prices fall following the release of their full-year earnings for...

Nuzran Sahib

Momentum No More: Japan3 Shipping Lines Report Worsening Container Segment Losses in FYQ4

At the lunch break on Friday, April 27th, the three major Japanese shipping lines all reported March 2018 fiscal year financial results, including...

Daniel Hellberg

Unseasonal Downtrend to Hurt Bulk Shipping in 4QFY18

The Baltic Dry Index (BDI) which factors in rates for Capesize, Panamax and Supramax vessels is showing a slightly different seasonal trend...

Nuzran Sahib

Container Shipping - Can CMA CGMs Bonds Withstand the Selling Pressure from the Broader Bond Market?

Strong profitability thanks to an improved market, NOL's contribution and Ocean Alliance network efficiencies Record revenues in FY17: Top line...

Drewry Maritime Financial Research

Ocean Network Express Aims to Generate Massive Operational Synergies and Change Fortunes for 3J

ONE soon to become the 5th largest containership company in the world, passing Hapag Lloyd Containership industry consolidation should lead to...

Nuzran Sahib

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