Infrastructure Analyst - Ports & Terminals, Drewry Maritime Financial Research

Victor Wai, CFA

Infrastructure Analyst - Ports & Terminals

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.

Equity Bottom-Up

Depressed earnings: Santos Brasil (STBP3 BZ Equity) is in a perilous condition, swinging to profitability only with the aid of tax refunds. Investors longing for a sale of its slumping Tecon Santos terminal, which underpins the more than 50% increase in share price over the past 3 months, are likely to be disappointed, as the company has decided to bankroll its flagship terminal by selling ancillary, but promising, assets.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/039/424/original/SB_1.JPG?1511942947" class="editor-image img-responsive" data-smartkarma-image-id="39424"></figure><div class="content-caption">Earnings deteriorate, investors don't seem to care</div>Expensive concession…

Depressed earnings: Santos Brasil (STBP3 BZ Equity) is in a perilous condition, swinging to profitability only with the aid of tax refunds. Investors longing for a sale of its slumping Tecon Santos terminal, which underpins the more than 50% increase in share price over the past 3 months, are likely to be disappointed, as the company has decided to bankroll its flagship terminal by selling ancillary, but promising, assets.Earnings deteriorate, investors don't seem to careExpensive concession…

Santos Brasil: Valuation Decouples from Fundamentals

Lead Analyst, Credit Research, Drewry Maritime Financial Research

Konstantinos Oikonomopoulos

Lead Analyst, Credit Research

Credit

Credit positives<ul>
<li>The group is focused in origin and destination cargo in emerging markets through long-term concessions (38 years on average while flagship Jebel Ali port concession ends in 88 years).</li>
<li>Fitch upgraded DPW and its bonds for second consecutive year by one notch to BBB+ in July 2017 following the group’s stable and growing cash flow generation. Moody’s had upgraded DPW in August 2016 to Baa2.</li>
<li>Strong management track record of expansion while keeping profitability and liquidity and…</li>
</ul>

Credit positives
The group is focused in origin and destination cargo in emerging markets through long-term concessions (38 years on average while flagship Jebel Ali port concession ends in 88 years).
Fitch upgraded DPW and its bonds for second consecutive year by one notch to BBB+ in July 2017 following the group’s stable and growing cash flow generation. Moody’s had upgraded DPW in August 2016 to Baa2.
Strong management track record of expansion while keeping profitability and liquidity and…


DP World Ltd. Credit Research - Credit Outlook Stable - Bond Valuation Neutral

<ul><li>
Hapag-Lloyd (HL) group's performance for the first nine months of 2017 was dominated by the consolidation of UASC for the first time: The group reported significant growth in transported volumes, thanks to UASC's teu contribution, which in conjunction with higher freight rates (although UASC realised lower rates, +2.2% on 9M17 y/y), led to EUR 9.5bn revenues for the last 12 months at end-3Q17, 21% compared to the FY16 figure. The UASC integration led to cost savings that were partly offset by…</li></ul>


Hapag-Lloyd (HL) group's performance for the first nine months of 2017 was dominated by the consolidation of UASC for the first time: The group reported significant growth in transported volumes, thanks to UASC's teu contribution, which in conjunction with higher freight rates (although UASC realised lower rates, +2.2% on 9M17 y/y), led to EUR 9.5bn revenues for the last 12 months at end-3Q17, 21% compared to the FY16 figure. The UASC integration led to cost savings that were partly offset by…

Equity Research Analyst, Maritime sector, Drewry Maritime Financial Research

Ankush Kathuria CFA, FRM

Equity Research Analyst, Maritime sector

AP Moeller - Maersk A/S / Equity Bottom-Up

Tempering our positive stance: APMM’s shares, after rising 20% over the first seven months of this year, are back to the levels they were trading in January. The stock has trended down since mid-July, following the sale of Maersk Oil and the recent cyber-attack. While we retain our positive bias towards APMM for the long term based on positive catalysts from the integration of Hamburg Sud and the benefits arising out of ongoing group restructuring, we are tempering our bullish view on the stock…

Tempering our positive stance: APMM’s shares, after rising 20% over the first seven months of this year, are back to the levels they were trading in January. The stock has trended down since mid-July, following the sale of Maersk Oil and the recent cyber-attack. While we retain our positive bias towards APMM for the long term based on positive catalysts from the integration of Hamburg Sud and the benefits arising out of ongoing group restructuring, we are tempering our bullish view on the stock…

AP Moller Maersk A/S (MAERSKB DC) - Positive, with Cautious Optimism

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Last week we noted that, after several quarters of improving profitability, container shipping earnings could begin to stagnate as the industry faces new headwinds and tougher Y/Y comparisons (see <a href="https://www.smartkarma.com/insights/you-are-here-taiwanese-japanese-container-carriers-recovery-valuations-since-hanjin-s-demise" target="_blank" data-smartkarma-citation="insights:14725">You Are Here--&gt; Taiwanese &amp; Japanese Container Carriers’ Recovery &amp; Valuations Since Hanjin’s Demise</a>). Q2FY17 results from Japan's three largest shipping companies, released during the midday break on October 31st, suggest those headwinds may indeed be gaining strength, and that further upside from the…

Last week we noted that, after several quarters of improving profitability, container shipping earnings could begin to stagnate as the industry faces new headwinds and tougher Y/Y comparisons (see You Are Here--&gt; Taiwanese &amp; Japanese Container Carriers’ Recovery &amp; Valuations Since Hanjin’s Demise). Q2FY17 results from Japan's three largest shipping companies, released during the midday break on October 31st, suggest those headwinds may indeed be gaining strength, and that further upside from the…

Container Shipping Cyclical Gains Waning; Japan's K-Line Cuts 3/18 OP Target on Rising Competition

Denmark

A.P. Moller - Maersk A/S operates as an integrated transport and logistics company. The Company offers container vessels, supply ships, special vessels, terminals, tug boat activities and reefer container box manufacturing. A.P. Moller-Maersk serves clients worldwide.

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AP Moller - Maersk A/S (MAERSKA DC)

Santos Brasil: Valuation Decouples from Fundamentals

Depressed earnings: Santos Brasil (STBP3 BZ Equity) is in a perilous condition, swinging to profitability only with the aid of tax refunds....

Drewry Maritime Financial Research

DP World Ltd. Credit Research - Credit Outlook Stable - Bond Valuation Neutral

Credit positives The group is focused in origin and destination cargo in emerging markets through long-term concessions (38 years on average while...

Drewry Maritime Financial Research

DMFR - Credit Research - Hapag-Lloyd AG

Hapag-Lloyd (HL) group's performance for the first nine months of 2017 was dominated by the consolidation of UASC for the first time: The group...

Drewry Maritime Financial Research

AP Moller Maersk A/S (MAERSKB DC) - Positive, with Cautious Optimism

Tempering our positive stance: APMM’s shares, after rising 20% over the first seven months of this year, are back to the levels they were trading...

Drewry Maritime Financial Research

Container Shipping Cyclical Gains Waning; Japan's K-Line Cuts 3/18 OP Target on Rising Competition

Last week we noted that, after several quarters of improving profitability, container shipping earnings could begin to stagnate as the industry...

Daniel Hellberg

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