Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Thematic (Sector/Industry)

On Tuesday morning we spoke to Mr. S.S. Teo, Managing Director of Pacific International Lines (PIL). PIL is a private, family-owned container carrier currently ranked number thirteen world-wide in terms of fleet carrying capacity (about 376,000 TEUs according to Alphaliner). PIL has a strong presence in trades between East Asia and India, the Middle East, and Africa, and a much smaller presence in the larger trades connecting Asia, North America, and Europe; it mainly serves these latter markets…

On Tuesday morning we spoke to Mr. S.S. Teo, Managing Director of Pacific International Lines (PIL). PIL is a private, family-owned container carrier currently ranked number thirteen world-wide in terms of fleet carrying capacity (about 376,000 TEUs according to Alphaliner). PIL has a strong presence in trades between East Asia and India, the Middle East, and Africa, and a much smaller presence in the larger trades connecting Asia, North America, and Europe; it mainly serves these latter markets…

Pacific International Lines' MD Discusses Container Sector Consolidation: 'Fewer Weddings' in 2017

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

Singamas Container Holdings / Equity Bottom-Up

We recently had a call with management from <a href="https://www.smartkarma.com/entities/13602" target="_blank" data-smartkarma-citation="entities:13602:1">Singamas Container Hldgs (716 HK)</a>, the second largest container manufacturer in the world after <a href="https://www.smartkarma.com/entities/11752" target="_blank" data-smartkarma-citation="entities:11752:1">China International Marine Cntnrs Gp Ltd (2039 HK; "CIMC")</a>, to understand the latest trends in the container manufacturing industry. 2016 saw a weak market for container manufacturers, and Singamas made a loss of US$59m. Singamas' share price has been weak until recently. We look at this name because: 1) the shipping industry has come off lows in 2016, 2)…

We recently had a call with management from Singamas Container Hldgs (716 HK), the second largest container manufacturer in the world after China International Marine Cntnrs Gp Ltd (2039 HK; "CIMC"), to understand the latest trends in the container manufacturing industry. 2016 saw a weak market for container manufacturers, and Singamas made a loss of US$59m. Singamas' share price has been weak until recently. We look at this name because: 1) the shipping industry has come off lows in 2016, 2)…

Call with Singamas: Tales of Hanjin, Water Based Paints, and New Reefer Plant

Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

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

Orient Overseas International / Equity Bottom-Up

A series of announced mergers and acquisitions in the global container shipping industry will soon pare the industry down to six large global carriers, plus a handful of smaller global and regional carriers, and a very large number of mostly insignificant regional and niche carriers. Clearly, the sector’s long-overdue consolidation has gained momentum over the last six months, and despite a recent jump in spot rates, we believe the recent wave of deals will soon force a response from the remaining 'leftover' carriers, who must either act to quickly gain neede scale through financial combinations or find ways to reduce exposure to chronic overcapacity in long-haul container shipping segments.In this note we look at the strategic responses available to five different small- to mid-sized Asian container carriers, four of which are listed in Hong Kong and Taiwan. We lay out the criteria we use to evaluate potential transactions within the sector, and profile these five carriers -- their histories, strengths, and needs. Based on these criteria and our understanding of these five carriers’ needs, we then suggest a few potential combinations that seem to make the most strategic and financial sense.

A series of announced mergers and acquisitions in the global container shipping industry will soon pare the industry down to six large global carriers, plus a handful of smaller global and regional carriers, and a very large number of mostly insignificant regional and niche carriers. Clearly, the sector’s long-overdue consolidation has gained momentum over the last six months, and despite a recent jump in spot rates, we believe the recent wave of deals will soon force a response from the remaining 'leftover' carriers, who must either act to quickly gain neede scale through financial combinations or find ways to reduce exposure to chronic overcapacity in long-haul container shipping segments.In this note we look at the strategic responses available to five different small- to mid-sized Asian container carriers, four of which are listed in Hong Kong and Taiwan. We lay out the criteria we use to evaluate potential transactions within the sector, and profile these five carriers -- their histories, strengths, and needs. Based on these criteria and our understanding of these five carriers’ needs, we then suggest a few potential combinations that seem to make the most strategic and financial sense.

Surging Momentum of Consolidation Will Soon Force Response from Asia's 'Leftover' Container Carriers

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.

Reasonable port valuation supports M&amp;A activities<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/443/original/ports5.JPG?1454570524" class="editor-image img-responsive" data-smartkarma-image-id="5443"></figure>Note: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER<figure class="editor-figure"><img src="https://static-prod.smartkarma.com/images/media/000/005/444/original/ports6.JPG?1454570793" class="editor-image img-responsive" data-smartkarma-image-id="5444"></figure> Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Reasonable port valuation supports M&amp;A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0x Source: Bloomberg, DMER Source: Company, DMER• As the global trade growth moderates, we expect significant volatility to persist in the year ahead. Port companies with sturdy balance sheet will be favoured over growth companies. Debt servicing ratio is expected to trend lower on higher interest and faltering earnings. Therefore, we look for terminal operators with…

Global Port Operators - Reasonable Valuation Supports M&A Activities

Hong Kong

Singamas Container Holdings Limited, through its subsidiaries, manufactures containers and related parts, operates container depot businesses, and provides container storage, repair and trucking as well as mid-stream services.

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Singamas Container Holdings (716 HK)

Pacific International Lines' MD Discusses Container Sector Consolidation: 'Fewer Weddings' in 2017

On Tuesday morning we spoke to Mr. S.S. Teo, Managing Director of Pacific International Lines (PIL). PIL is a private, family-owned container...

Daniel Hellberg

Call with Singamas: Tales of Hanjin, Water Based Paints, and New Reefer Plant

We recently had a call with management from Singamas Container Hldgs (716 HK), the second largest container manufacturer in the world after China...

Ke Yan, CFA, FRM

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

Surging Momentum of Consolidation Will Soon Force Response from Asia's 'Leftover' Container Carriers

A series of announced mergers and acquisitions in the global container shipping industry will soon pare the industry down to six large global...

Daniel Hellberg

Global Port Operators - Reasonable Valuation Supports M&A Activities

Reasonable port valuation supports M&A activitiesNote: Market-weighted EV/EBITDA ticked higher from FY14 level of 14.8x to 15.0xSource:...

Drewry Maritime Financial Research

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