Research Update: Wan Hai Lines Ltd. Rating Affirmed At 'BB+' On High Net Cash Position; Outlook Stable

Wan Hai Lines Ltd. provides services in intra-Asia, transpacific, and the Middle East. The company generated funds from operations of new Taiwan dollar (NT$) 121.6 billion in 2022. Wan Hai should be able to absorb the hit from plunging freight rates and maintain a net cash position in 2023-2024. This is because of its enhanced cash position due to strong operating cash flow over the past two years. This is despite still high level of capital expenditure (capex) for capacity expansion. Increasing exposure to competitive long-haul routes, as well as Wan Hai's relatively smaller operating scale, could lead to volatility in profitability and higher leverage through business cycles. We affirmed our issuer credit rating on Taiwan-based Wan Hai at 'BB+'.

...- Wan Hai Lines Ltd. provides services in intra-Asia, transpacific, and the Middle East. The company generated funds from operations of new Taiwan dollar (NT$) 121.6 billion in 2022. - Wan Hai should be able to absorb the hit from plunging freight rates and maintain a net cash position in 2023-2024. This is because of its enhanced cash position due to strong operating cash flow over the past two years. This is despite still high level of capital expenditure (capex) for capacity expansion. - Increasing exposure to competitive long-haul routes, as well as Wan Hai's relatively smaller operating scale, could lead to volatility in profitability and higher leverage through business cycles. - We affirmed our issuer credit rating on Taiwan-based Wan Hai at '##+'. - The stable rating outlook reflects our view that Wan Hai will continue to maintain a net cash position over the next one to two years....

Research Update