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

Orient Overseas International / Equity Bottom-Up

<ul>
<li>Price momentum and volume growth both remained weak in September </li>
<li>Mideast ceasefire raises possibility of Suez Canal re-opening in 2026</li>
<li>Expect pricing to remain weak; Suez re-start would likely lead to losses</li>
</ul>


Price momentum and volume growth both remained weak in September 
Mideast ceasefire raises possibility of Suez Canal re-opening in 2026
Expect pricing to remain weak; Suez re-start would likely lead to losses


Monthly Container Shipping Tracker | Momentum, Volume Still Weak | Suez Restoration? (October 2025)

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Lower average freight rate momentum and deceleration in 4Q24 load factor expansions for <a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a> have raised alarm for a weaker industry outlook.</li>
<li>Spot freight rate has come down by 6.8% in the last two weeks. The potential ease of conflicts in Ukraine and the Middle East may induce a capacity return.</li>
<li>The consensus forecasts for FY25-26 have been downgraded by 5-9%, suggesting caution in the market. Its dividend yield will lower from 14.0% in FY24 to just 4.3% in FY26.</li>
</ul>


Lower average freight rate momentum and deceleration in 4Q24 load factor expansions for Orient Overseas International (316 HK) have raised alarm for a weaker industry outlook.
Spot freight rate has come down by 6.8% in the last two weeks. The potential ease of conflicts in Ukraine and the Middle East may induce a capacity return.
The consensus forecasts for FY25-26 have been downgraded by 5-9%, suggesting caution in the market. Its dividend yield will lower from 14.0% in FY24 to just 4.3% in FY26.


Orient Overseas Intl (316 HK): Initial Warning Signs?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a>'s 25.9% YTD surge in share price is difficult to justify, as the load factor started to contract and the average freight rate declined.  </li>
<li>Transpacific and Asia-Europe freight rates plunged by 14.7% and 17.3% in 2Q25, respectively. The transpacific volume also registered the first YoY decline in the quarter. </li>
<li>Its P/B of 0.85x is 1SD above average, and is way higher than FY21-22. However, the FY25F earnings of US$1.5bn are incomparable to US$7-10bn in FY21-22.</li>
</ul>



Orient Overseas International (316 HK)'s 25.9% YTD surge in share price is difficult to justify, as the load factor started to contract and the average freight rate declined.  
Transpacific and Asia-Europe freight rates plunged by 14.7% and 17.3% in 2Q25, respectively. The transpacific volume also registered the first YoY decline in the quarter. 
Its P/B of 0.85x is 1SD above average, and is way higher than FY21-22. However, the FY25F earnings of US$1.5bn are incomparable to US$7-10bn in FY21-22.


Orient Overseas Intl (316 HK): Something Seems Not Quite Right!

<ul>
<li>A "Long <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC Intl (1308 HK)</a>, Short <a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">OOIL (316 HK)</a>" pair trade should benefit from the more resilient intra-Asia trade and capture the tariff-induced challenges on Trans-Pacific trade. </li>
<li>OOIL derived 28.3% of its volume and 38.7% of its revenue from the Trans-Pacific route in 1Q25. Instead, SITC generated 100% of its revenue from the Asian market.</li>
<li>While OOIL's 0.7x P/B is cheaper than SITC's 2.5x, its FY25 ROE of 10.6% is lower than SITC's 34.6%. SITC's dividend yield is also trending up, against OOIL's down.</li>
</ul>


A "Long SITC Intl (1308 HK), Short OOIL (316 HK)" pair trade should benefit from the more resilient intra-Asia trade and capture the tariff-induced challenges on Trans-Pacific trade. 
OOIL derived 28.3% of its volume and 38.7% of its revenue from the Trans-Pacific route in 1Q25. Instead, SITC generated 100% of its revenue from the Asian market.
While OOIL's 0.7x P/B is cheaper than SITC's 2.5x, its FY25 ROE of 10.6% is lower than SITC's 34.6%. SITC's dividend yield is also trending up, against OOIL's down.


China Pair Trade: Long SITC Intl (1308 HK), Short OOIL (316 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/orient-overseas-international" target="_blank" data-smartkarma-citation="entities:801:1" rel="noopener">Orient Overseas International (316 HK)</a> sits on decent yields of 12% for FY24 and 9.6% for FY25. Its net cash (66.2% of the share price) can support such dividends.</li>
<li>Despite the retreat from the recent peak, the spot freight rates are 9.7% and 145% higher than 1H24 and 2H23 respectively, pointing to better 2H24 earnings.</li>
<li>Operationally, it recorded the first YoY realised rate increase in 2Q24 after 6 quarters of consecutive decline. Its load factor also grew 2.3pp YoY in the quarter.</li>
</ul>



Orient Overseas International (316 HK) sits on decent yields of 12% for FY24 and 9.6% for FY25. Its net cash (66.2% of the share price) can support such dividends.
Despite the retreat from the recent peak, the spot freight rates are 9.7% and 145% higher than 1H24 and 2H23 respectively, pointing to better 2H24 earnings.
Operationally, it recorded the first YoY realised rate increase in 2Q24 after 6 quarters of consecutive decline. Its load factor also grew 2.3pp YoY in the quarter.


Orient Overseas Intl (316 HK): Don't Overlook Its Yield, Backed by Net Cash

Hong Kong

Orient Overseas International Ltd, through its subsidiaries, owns and leases ships, operates terminals, and provides freight forwarding and container transportation services.  The Company also develops and invests in properties, leases equipment, and invests in securities.

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Orient Overseas International (316 HK)

Monthly Container Shipping Tracker | Momentum, Volume Still Weak | Suez Restoration? (October 2025)

Price momentum and North American inbound demand both remained weak in September, and we believe a new ceasefire raises the likelihood of a Suez...

Tracking Traffic

Orient Overseas Intl (316 HK): Initial Warning Signs?

Lower freight rates and load factor expansion signal a weaker outlook, with potential capacity return due to easing conflicts. FY25-26 forecasts...

Osbert Tang, CFA

Orient Overseas Intl (316 HK): Something Seems Not Quite Right!

OOIL's share price surge is hard to justify as freight rates decline, volume decelerates and load factor contracts. Its P/B ratio is also above...

Osbert Tang, CFA

China Pair Trade: Long SITC Intl (1308 HK), Short OOIL (316 HK)

There is a clear divergence between SITC's and OOIL's 1Q25 operating performance. SITC's revenue grew 38.6%, driven by a 6.8% volume growth and a...

Osbert Tang, CFA

Orient Overseas Intl (316 HK): Don't Overlook Its Yield, Backed by Net Cash

Supported by net cash, OOIL offers attractive yields of 12% and 9.6% for FY24 and FY25. Improving operational performance points to a positive 2H24...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Monthly Container Shipping Tracker | Momentum, Volume Still Weak | Suez Restoration? (October 2025)

Price momentum and North American inbound demand both remained weak in September, and we believe a new ceasefire raises the likelihood of a Suez...

Tracking Traffic

Orient Overseas Intl (316 HK): Initial Warning Signs?

​Lower freight rates and load factor expansion signal a weaker outlook, with potential capacity return due to easing conflicts. FY25-26 forecasts...

Osbert Tang, CFA

Orient Overseas Intl (316 HK): Something Seems Not Quite Right!

OOIL's share price surge is hard to justify as freight rates decline, volume decelerates and load factor contracts. Its P/B ratio is also above...

Osbert Tang, CFA

China Pair Trade: Long SITC Intl (1308 HK), Short OOIL (316 HK)

There is a clear divergence between SITC's and OOIL's 1Q25 operating performance. SITC's revenue grew 38.6%, driven by a 6.8% volume growth and a...

Osbert Tang, CFA

Orient Overseas Intl (316 HK): Don't Overlook Its Yield, Backed by Net Cash

Supported by net cash, OOIL offers attractive yields of 12% and 9.6% for FY24 and FY25. Improving operational performance points to a positive 2H24...

Osbert Tang, CFA

Lower freight rates and load factor expansion signal a weaker outlook, with potential capacity return due to easing conflicts. FY25-26 forecasts...