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)

<ul><li>Global throughput strengthened in 2017, with Drewry Maritime Research revising upwards the year-on-year growth from 5.5% to 6.0%. While the pace is likely to moderate, Drewry expects a flow of 775m teu in 2018, representing 4.3% over the projected volume in 2017. Modest port capacity addition is expected to lift utilisation above 70% by 2021.</li><li>The valuation premium of the Drewry Port Index to the MSCI Emerging Markets Index was about 15%-20% for a substantial period in 2017, continuing to trade in the range, while growth investors re-examine the earnings momentum of ports.</li><li>Our high conviction long pick is GLPR on a resurgent Russian economy that benefits the largest port operator directly. On the flip side, our high-conviction short is Santos Brasil. Notwithstanding the macroeconomic upturn, the intense port competition and the piling pressure to expand amid overcapacity are likely to strain Santos Brasil’s balance sheet in FY18e.</li></ul>

Global throughput strengthened in 2017, with Drewry Maritime Research revising upwards the year-on-year growth from 5.5% to 6.0%. While the pace is likely to moderate, Drewry expects a flow of 775m teu in 2018, representing 4.3% over the projected volume in 2017. Modest port capacity addition is expected to lift utilisation above 70% by 2021.The valuation premium of the Drewry Port Index to the MSCI Emerging Markets Index was about 15%-20% for a substantial period in 2017, continuing to trade in the range, while growth investors re-examine the earnings momentum of ports.Our high conviction long pick is GLPR on a resurgent Russian economy that benefits the largest port operator directly. On the flip side, our high-conviction short is Santos Brasil. Notwithstanding the macroeconomic upturn, the intense port competition and the piling pressure to expand amid overcapacity are likely to strain Santos Brasil’s balance sheet in FY18e.

Hamburger Hafen und Logistik AG (HHFA GR)

Santos Brasil Participacoes Sa. (STBP11 BZ)

Ports Outlook - Modest Earnings Growth in 2018