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.

Thematic (Sector/Industry)

Chinese Port Operators - Core Earnings Remain WeakChinese ports have had a respectable stock price appreciation since releasing their financial results, outpacing both our proprietary Drewry Port Index and MSCI China Transportation and Infrastructure benchmarks. Out of the five Chinese port operators that we track, four reported in the past two weeks which saw their share prices strengthening 3.6% on average. The market valuations of Chinese operators seem stretched to us, not fully reflecting…

Chinese Port Operators - Core Earnings Remain WeakChinese ports have had a respectable stock price appreciation since releasing their financial results, outpacing both our proprietary Drewry Port Index and MSCI China Transportation and Infrastructure benchmarks. Out of the five Chinese port operators that we track, four reported in the past two weeks which saw their share prices strengthening 3.6% on average. The market valuations of Chinese operators seem stretched to us, not fully reflecting…

Chinese Port Operators - Core Earnings Remain Weak

Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Extending my point about more demanding transportation frameworks going forward (see <a href="https://www.smartkarma.com/insights/comfortdelgro-fy16-results-an-era-where-competition-hits-a-higher-gear" target="_blank" data-smartkarma-citation="insights:8719">ComfortDelGro FY16 Results: An Era Where Competition Hits a Higher Gear</a> ), the recent fire-bomb attack on Hong Kong’s MTR that left 19 injured signals increasing costs for transport operators. This article presents another reason why investors should sell MTR Corp, on top of points already provided by fellow insight provider Sameer Taneja in an earlier piece <a href="https://www.smartkarma.com/insights/mtr-66-hk-conviction-sell-thesis" target="_blank" data-smartkarma-citation="insights:7982">MTR (66 HK): Conviction Sell Thesis</a><h2>Security Costs to</h2>…

Extending my point about more demanding transportation frameworks going forward (see ComfortDelGro FY16 Results: An Era Where Competition Hits a Higher Gear ), the recent fire-bomb attack on Hong Kong’s MTR that left 19 injured signals increasing costs for transport operators. This article presents another reason why investors should sell MTR Corp, on top of points already provided by fellow insight provider Sameer Taneja in an earlier piece MTR (66 HK): Conviction Sell ThesisSecurity Costs to…

66 HK and SBUS SP: Attack on HK Metro Signals Increases in Transport Operators' Costs

Equity Bottom-Up

In our earlier updates we looked at the macros of the Chinese port operators and key regional developments, <a href="https://www.smartkarma.com/insights/dmer-chinese-port-operators-avoid-bottom-fishing-in-troubled-waters" target="_blank">https://www.smartkarma.com/insights/dmer-chinese-port-operators-avoid-bottom-fishing-in-troubled-waters</a>, <a href="https://www.smartkarma.com/insights/dmer-chinese-port-operators-2-0-pearl-river-delta-yangtze-river-delta-and-bohai-rim-hk-update" target="_blank">https://www.smartkarma.com/insights/dmer-chinese-port-operators-2-0-pearl-river-delta-yangtze-river-delta-and-bohai-rim-hk-update</a>. In this last update we look at the individual listed operators. <ul><li>Current valuations of Chinese operators are slow to reflect weak earnings, while the market has downshifted valuations of non-Chinese peers. Chinese operators stand to weaken further when deteriorating earnings momentum becomes apparent in upcoming results.</li><li>Chinese operators have improved their net gearing profiles in the past six months, adopting a more cautious approach to the balance sheet leveraging. With parental support and connection with strong affiliates, none of the Chinese operators falls under the High investment risk category. </li></ul>

In our earlier updates we looked at the macros of the Chinese port operators and key regional developments, https://www.smartkarma.com/insights/dmer-chinese-port-operators-avoid-bottom-fishing-in-troubled-waters, https://www.smartkarma.com/insights/dmer-chinese-port-operators-2-0-pearl-river-delta-yangtze-river-delta-and-bohai-rim-hk-update. In this last update we look at the individual listed operators. Current valuations of Chinese operators are slow to reflect weak earnings, while the market has downshifted valuations of non-Chinese peers. Chinese operators stand to weaken further when deteriorating earnings momentum becomes apparent in upcoming results.Chinese operators have improved their net gearing profiles in the past six months, adopting a more cautious approach to the balance sheet leveraging. With parental support and connection with strong affiliates, none of the Chinese operators falls under the High investment risk category. 

DMER - Chinese Port Operators 3.0 -Cosco Shipping Ports Our Top Pick, Dalian Port Least Favoured

Reasonable port valuation supports M&amp;A activities<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/443/original/ports5.JPG?1454570524" class="editor-image img-responsive" data-smartkarma-image-id="5443"></figure>Note: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/444/original/ports6.JPG?1454570793" class="editor-image img-responsive" data-smartkarma-image-id="5444"></figure> Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Reasonable port valuation supports M&amp;A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Global Port Operators - Reasonable Valuation Supports M&A Activities

Intensifying concerns about China as it registered its slowest growth since 1990 set the tone for a roller-coaster ride in 2016. The largest emerging country expanded 6.9%y/y in 2015, prompting the IMF to slash its global growth forecast for the third time in less than a year. Drewry Port Index fell 14% in the first three weeks of trading. The divergence between MSCI World and Drewry Port Index is the greatest since January 2015, pointing to a value buy for the port index compared with a year ago.

Intensifying concerns about China as it registered its slowest growth since 1990 set the tone for a roller-coaster ride in 2016. The largest emerging country expanded 6.9%y/y in 2015, prompting the IMF to slash its global growth forecast for the third time in less than a year. Drewry Port Index fell 14% in the first three weeks of trading. The divergence between MSCI World and Drewry Port Index is the greatest since January 2015, pointing to a value buy for the port index compared with a year ago.

Port Operators 2016 - Sieve Out Value Companies Amid Slowing Trade Growth

Hong Kong

Tianjin Port Development Holdings Limited operates container terminals in China.  The company provides container handling operations, stacking and warehousing services and non-containerized cargo services.

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Tianjin Port (3382 HK)

Chinese Port Operators - Core Earnings Remain Weak

Chinese Port Operators - Core Earnings Remain WeakChinese ports have had a respectable stock price appreciation since releasing their financial...

Drewry Maritime Financial Research

66 HK and SBUS SP: Attack on HK Metro Signals Increases in Transport Operators' Costs

Extending my point about more demanding transportation frameworks going forward (see ComfortDelGro FY16 Results: An Era Where Competition Hits a...

Valerie Law, CFA

DMER - Chinese Port Operators 3.0 -Cosco Shipping Ports Our Top Pick, Dalian Port Least Favoured

In our earlier updates we looked at the macros of the Chinese port operators and key regional developments,...

Drewry Maritime Financial Research

Global Port Operators - Reasonable Valuation Supports M&A Activities

Reasonable port valuation supports M&A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0xSource:...

Drewry Maritime Financial Research

Port Operators 2016 - Sieve Out Value Companies Amid Slowing Trade Growth

Intensifying concerns about China as it registered its slowest growth since 1990 set the tone for a roller-coaster ride in 2016. The largest...

Drewry Maritime Financial Research

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