Transport Sector, China and Asia-focused Research

Charles De Trenck

Equity Bottom-Up

Orient Overseas International / Equity Bottom-Up

Don’t get me wrong. I still like <a href="https://www.smartkarma.com/entities/801" target="_blank" data-smartkarma-citation="entities:801:1">Orient Overseas Intl Ltd (316 HK)</a>, OOIL/OOCL, as an operator long term. Always have. And I may come back at another price or time. But there are a few issues worth drawing out, now that analysts have gone gaga over shipping – including notably <a href="https://www.smartkarma.com/entities/286" target="_blank" data-smartkarma-citation="entities:286:1">China COSCO Holdings (H) (1919 HK)</a> which is at some 3x OOIL on a P/B and which still is not fit for long term investing. I list my reasons in selling OOIL in easy bullets further below.OOIL was at HK$30 when I bought and…

Don’t get me wrong. I still like Orient Overseas Intl Ltd (316 HK), OOIL/OOCL, as an operator long term. Always have. And I may come back at another price or time. But there are a few issues worth drawing out, now that analysts have gone gaga over shipping – including notably China COSCO Holdings (H) (1919 HK) which is at some 3x OOIL on a P/B and which still is not fit for long term investing. I list my reasons in selling OOIL in easy bullets further below.OOIL was at HK$30 when I bought and…

Why I Just Sold Orient Overseas (OOIL) At HK$45

Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Thematic (Sector/Industry)

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

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Institutional investors have long shied away from owning <a href="https://www.smartkarma.com/entities/15428" target="_blank" data-smartkarma-citation="entities:15428:1">Evergreen Marine Corp Ltd (2603 TT)</a> for two reasons unrelated to the container shipping sector's chronically weak earnings:<ol><li>Concerns about potential conflicts of interest between the Listco and its founding family</li><li>A Group structure that is perceived to be opaque or at least unnecessarily complex</li></ol>In this note we strive to show that investor concerns about potential conflicts and a lack of transparency are misplaced. We believe the interests of the Listco (Evergreen Marine Corp., or EMC) and its founding family are closely aligned, and EMC's earnings results seem to bear this out. Furthermore, a bit of digging shows that the basic Group structure is in fact quite uncomplicated, and the improvement in Taiwan's reporting standards over the years means that investors can obtain a clear picture of the EMC's financial status every quarter.We believe EMC is unjustifiably cheap relative to some of its closest Asian peers. At its current price, EMC presents an attractive way to play a recovery in the rapidly consolidating container shipping industry. We have set a target price of NT$16 per share and recommend investors buy EMC on dips.

Institutional investors have long shied away from owning Evergreen Marine Corp Ltd (2603 TT) for two reasons unrelated to the container shipping sector's chronically weak earnings:Concerns about potential conflicts of interest between the Listco and its founding familyA Group structure that is perceived to be opaque or at least unnecessarily complexIn this note we strive to show that investor concerns about potential conflicts and a lack of transparency are misplaced. We believe the interests of the Listco (Evergreen Marine Corp., or EMC) and its founding family are closely aligned, and EMC's earnings results seem to bear this out. Furthermore, a bit of digging shows that the basic Group structure is in fact quite uncomplicated, and the improvement in Taiwan's reporting standards over the years means that investors can obtain a clear picture of the EMC's financial status every quarter.We believe EMC is unjustifiably cheap relative to some of its closest Asian peers. At its current price, EMC presents an attractive way to play a recovery in the rapidly consolidating container shipping industry. We have set a target price of NT$16 per share and recommend investors buy EMC on dips. 

Evergreen Marine: Not Really So Complex After All, & Cheap on EV/Capacity

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.

Orient Overseas International Limited (316 HK)- "It Ain’t Over ‘til It’s Over”In our earlier update, we had called OOIL " A perfect bride to be", <a href="https://www.smartkarma.com/insights/orient-overseas-international-limited-316-hk-a-perfect-bride-to-be-but-who-is-the-perfect-suitor" target="_blank">https://www.smartkarma.com/insights/orient-overseas-international-limited-316-hk-a-perfect-bride-to-be-but-who-is-the-perfect-suitor</a>. This morning Caixin reported Cosco bidding for OOIL with CMA CGM and Evergreen still in fray, citing an unidentified Cosco employee. Both OOIL and COSCO have denied the report. <blockquote>
Orient Overseas Says Cannot Respond to…
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Orient Overseas International Limited (316 HK)- "It Ain’t Over ‘til It’s Over”In our earlier update, we had called OOIL " A perfect bride to be", https://www.smartkarma.com/insights/orient-overseas-international-limited-316-hk-a-perfect-bride-to-be-but-who-is-the-perfect-suitor. This morning Caixin reported Cosco bidding for OOIL with CMA CGM and Evergreen still in fray, citing an unidentified Cosco employee. Both OOIL and COSCO have denied the report. 
Orient Overseas Says Cannot Respond to…


Orient Overseas International Limited (316 HK)-"It Ain't Over 'til It's Over"

Orient Overseas International Limited (316 HK)-A Perfect Bride-To-Be, but Who Is the Perfect Suitor?<blockquote>
Container shipping remains remarkably fragmented, with the top five operators accounting for less than half the global market. This presents considerable opportunity for further consolidation. Until recently, the industry had experienced a 10-year lull of M&amp;A activity following a flurry of takeovers in the early 2000s. Yet in the past 12 months four major deals have taken place involving several…
</blockquote>

Orient Overseas International Limited (316 HK)-A Perfect Bride-To-Be, but Who Is the Perfect Suitor?
Container shipping remains remarkably fragmented, with the top five operators accounting for less than half the global market. This presents considerable opportunity for further consolidation. Until recently, the industry had experienced a 10-year lull of M&amp;A activity following a flurry of takeovers in the early 2000s. Yet in the past 12 months four major deals have taken place involving several…


Orient Overseas International Limited (316 HK)-A Perfect Bride-To-Be, but Who Is the Perfect Suitor?

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)

Why I Just Sold Orient Overseas (OOIL) At HK$45

Don’t get me wrong. I still like Orient Overseas Intl Ltd (316 HK), OOIL/OOCL, as an operator long term. Always have. And I may come back at...

Charles De Trenck

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

Evergreen Marine: Not Really So Complex After All, & Cheap on EV/Capacity

Institutional investors have long shied away from owning Evergreen Marine Corp Ltd (2603 TT) for two reasons unrelated to the container shipping...

Daniel Hellberg

Orient Overseas International Limited (316 HK)-"It Ain't Over 'til It's Over"

Orient Overseas International Limited (316 HK)- "It Ain’t Over ‘til It’s Over”In our earlier update, we had called OOIL " A perfect bride to...

Drewry Maritime Financial Research

Orient Overseas International Limited (316 HK)-A Perfect Bride-To-Be, but Who Is the Perfect Suitor?

Orient Overseas International Limited (316 HK)-A Perfect Bride-To-Be, but Who Is the Perfect Suitor? Container shipping remains remarkably...

Drewry Maritime Financial Research

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