Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Event-Driven

ZIM Integrated Shipping Services / Event-Driven

ZIM Integrated Shipping Services (ZIM US)

<ul>
<li>Hapag-Lloyd last week announced an all cash US$4.2 bn bid for shares of Israel's ZIM</li>
<li>The deal will likely face regulators' scrutiny in Israel, Germany, maybe in EU, US too</li>
<li>Moreover, we believe long-term returns on the acquired assets will likely be negative</li>
</ul>


Hapag-Lloyd last week announced an all cash US$4.2 bn bid for shares of Israel's ZIM
The deal will likely face regulators' scrutiny in Israel, Germany, maybe in EU, US too
Moreover, we believe long-term returns on the acquired assets will likely be negative


Hapag-Lloyd Announced US$4.2 Bn Bid for Israel's ZIM | Unfortunately, We Can't Get the Math to Math

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>The 1H25 net profit of US$630m (+79.7% YoY) for <a href="https://www.smartkarma.com/entities/sitc-international-holdings" target="_blank" data-smartkarma-citation="entities:15301:1" rel="noopener">SITC International (1308 HK)</a> is impressive. It maintains a generous 70% payout ratio, yielding 4.8% for the interim.</li>
<li>Its outlook for 2H25 stays positive despite the recent pull-back in spot rates. Overall demand-supply dynamics continue to be favourable in the short and medium term.</li>
<li>With interim earnings already accounting for 58% of full-year consensus, there is room for an upgrade. At 3.3x P/B, it is not expensive given 30-40% ROEs. </li>
</ul>


The 1H25 net profit of US$630m (+79.7% YoY) for SITC International (1308 HK) is impressive. It maintains a generous 70% payout ratio, yielding 4.8% for the interim.
Its outlook for 2H25 stays positive despite the recent pull-back in spot rates. Overall demand-supply dynamics continue to be favourable in the short and medium term.
With interim earnings already accounting for 58% of full-year consensus, there is room for an upgrade. At 3.3x P/B, it is not expensive given 30-40% ROEs. 


SITC International (1308 HK): A Charming 1H25

<ul>
<li>Taiwan's two deep-sea container carriers reported a Y/Y decline in combined revenue in April</li>
<li>In USD terms, the two carriers' combined revenues are down -48% vs 2024 peak levels</li>
<li>Sector YTD &amp; Y/Y share performance do <em>not</em> reflect worsening fundamentals; stay SHORT</li>
</ul>


Taiwan's two deep-sea container carriers reported a Y/Y decline in combined revenue in April
In USD terms, the two carriers' combined revenues are down -48% vs 2024 peak levels
Sector YTD &amp; Y/Y share performance do not reflect worsening fundamentals; stay SHORT


Taiwan's Deep-Sea Carriers Saw Revenue Decline Y/Y in April, First Time Since Dec-2023 | Stay SHORT!

<ul>
<li>Spot container rates have surged, owing to conflict near Red Sea / Suez Canal</li>
<li>On top of higher spot rates, imposition of new fees also boosting carrier revenue</li>
<li>Evergreen's average monthly US$ revenue <em>increased</em> from Q123 to Q423</li>
</ul>


Spot container rates have surged, owing to conflict near Red Sea / Suez Canal
On top of higher spot rates, imposition of new fees also boosting carrier revenue
Evergreen's average monthly US$ revenue increased from Q123 to Q423


Spot Container Rates Surge | New Fees Also Boosting Carrier Revenue | Increases Could Lift '24 Rates

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Hapag-Lloyd's first-quarter 2025 results indicate a robust start to the year, supported by solid financial performance despite ongoing operational challenges.</li><li>The company recorded a significant year-over-year increase in transport volumes, achieving a 9% growth.</li><li>This outpaces the global market growth rate of approximately 4.2%, demonstrating Hapag-Lloyd's effective market positioning and operational efficiency.</li></ul>

Hapag-Lloyd's first-quarter 2025 results indicate a robust start to the year, supported by solid financial performance despite ongoing operational challenges.The company recorded a significant year-over-year increase in transport volumes, achieving a 9% growth.This outpaces the global market growth rate of approximately 4.2%, demonstrating Hapag-Lloyd's effective market positioning and operational efficiency.

Hapag-Lloyd: Initiation of Coverage- Can a $5.9 Billion War Chest Shield It From Global Turmoil?

Germany

Hapag-Lloyd AG operates as a container shipping line company. The Company offers transportation of goods by sea, road, rail, and inland waterway vessels. Hapag-Lloyd serves customers worldwide.

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Hapag-Lloyd (HLAG GY)

Hapag-Lloyd Announced US$4.2 Bn Bid for Israel's ZIM | Unfortunately, We Can't Get the Math to Math

The deal doesn't make financial sense unless EBITDA margins average 20% or better over the next 15 years, which is more than current margins and...

Tracking Traffic

SITC International (1308 HK): A Charming 1H25

SITC issued a positive profit alert for FY25, suggesting its net profit will be between US$1.2bn and US$1.23bn (+16% to 18.0% YoY). This is 1-3%...

Osbert Tang, CFA

Taiwan's Deep-Sea Carriers Saw Revenue Decline Y/Y in April, First Time Since Dec-2023 | Stay SHORT!

April revenue figures from Evergreen and Yang Ming suggest a sharp deterioration in fundamentals, which has not been reflected in YTD or Y/Y share...

Tracking Traffic

Spot Container Rates Surge | New Fees Also Boosting Carrier Revenue | Increases Could Lift '24 Rates

Spot container rates have surged, and carriers are also benefitting from newly-imposed ancillary charges. It's possible the ongoing conflict in the...

Tracking Traffic

Hapag-Lloyd: Initiation of Coverage- Can a $5.9 Billion War Chest Shield It From Global Turmoil?

Hapag-Lloyd's first-quarter 2025 results indicate a robust start to the year, supported by solid financial performance despite ongoing operational...

Baptista Research

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